Why is simple interest simple and when is it used?

Simple interest is the cost of using or borrowing money without compound interest or interest on interest. Simple interest works in your favor when you're a borrower because it keeps the overall amount that you pay lower than it would be with compound interest

Step-by-step explanation:

Simple Interest is considered "Simple" due to it's straight-forward method; where you add your annual interest rate (%) to your initial principal value, instead of compound which you add your annual interest rate (%) onto your new principal value.

Simple interest is usually used to calculate their first year interest ($).

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step-by-step explanation: