**SIMPLE
INTEREST**

**A
level interest amount throughout the life of the loan and which does
not take into account that interest can earn interest. That is, not
***compound interest. *For example, if $100,000 is invested at 1%
per month over 12 months the investment will show a simple interest
return of $12 000 per annum. However, if the interest were kept in
the investment account it would earn interest and thus showing a
compound amount of $12,682.50pa. That is, a compound rate of 12.68%
pa.