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When you borrow money, you’ll also pay interest on top of the amount you borrowed.. Interest is the money the lender gets for loaning you the money. Read Next: 5 Subtly Genius Moves All Wealthy People ...

In the real world, simple interest is rarely used. When you deposit money into an interest-bearing account, or take out a line of credit, the interest that accumulates is added to the principal, and ...

Simple interest is paid only on the principal of an investment or loan. Compound interest is calculated on both the initial principal and accumulated interest. Over time, compound interest generally ...