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单词 simple interest
释义
simple interest

Mathematics
  • Suppose that a sum of money P is invested, attracting interest at i per cent a year. When simple interest is given, the interest due each year is (i/100)P and so, after n years, the amount becomes

    P(1+ni100).

    When points are plotted on graph paper to show how the amount increases, they lie on a straight line. Most banks and building societies in fact do not operate in this way but use the method of compound interest.


Economics
  • The system by which repayment of a loan after n periods requires payment of a sum equal to the principal plus n times the interest payable for a single period. If the principal is P and the interest rate per period is r, at the end of n periods payment of P(1 + nr) is required. As n increases, the proportional rate of return to the lender goes down, as the proportional return for the (n + 1)th period is rP/[(1 + nr)P], which is a decreasing function of n. Simple interest is very rarely used, except for loans of very short duration.


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