This is where interest is charged on the initial amount borrowed or invested only. E.g 100k is borrowed. Interest at 10% is 10K After the first year there will be an amount owning of 110k. the interest for the second year will be calculated on the 100k(original amount) rather than the 110k.
Knowledge is the key to success. That is why we have gone to great lengths to get you these business terms and jargon, and explain them in Plain English. Its very easy to comprehend. Learn to understanding and know your business jargon. This will keep you informed among your peers. Bookmark Your business dictionary.