If you’re a savvy long-term financial planner, you’ve probably heard of simple interest and how it can be a helpful tool in the planning of your future. But why is simple interest useful? Let’s take a look.

First of all, what is simple interest? This type of calculation is interest calculated on the principal amount borrowed, and it is only charged on that principal amount. For example, if you borrow $1,000 at an interest rate of 5%, you will be charged $50 in interest each year. Over time, this simple interest can add up to significant savings, depending on the rate and length of your loan.

Another advantage of simple interest is that it allows you to compare different types of investments easily. Comparing the cost of a loan with a fixed interest rate to a loan with a variable interest rate can be time consuming and complicated, but with simple interest, the math is straightforward. This makes it easier to choose an investment or loan option that will give you the best return.

Finally, using simple interest can be beneficial because it can help you plan for your long-term financial future. By understanding how your interest rates and payments will change over