Interest earned only on the original principal amount invested is called _____ interest.

A) Free.
B) Annual.
C) Simple.
D) Interest on.
E) Compound.

Simple Interest

A method of calculating the interest charge on a loan or financial product based on the original principal amount and the interest rate over a period of time.

Principal Amount

This is the original sum of money borrowed in a loan or put into an investment, not including any interest or dividends.

Invested

Describes the act of allocating resources, usually money, into something to earn income or gain profits.