The Financial Dictionary

Understanding your finances doesn't have to be difficult. Here is a helpful dictionary of some basic financial terms. 
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Compound Interest: compound interest is interest earned on an investment, plus interest earned on that investment over time.

• Compound interest can be thought of as interest earning interest.  

Simple Interest: simple interest is interest that is only earned on the principal.

• Interest can be thought of as the price paid for the use of borrowed money, or money earned by deposited funds. Basically, interest is a fee paid by a borrower to the owner of what was borrowed.