Retrieving "Short Term Lending" from the archives

Cross-reference notes under review

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1. Interest

   Linked via "short-term lending"

   Simple vs. Compound Interest
   Simple interest accrues solely on the original principal amount. This method is often utilized for short-term lending or specific contractual obligations where the accretion of earnings is explicitly disallowed.
   Compound interest, conversely, is calculated on the principal plus any previously accumulated interest. This mechanism, sometimes referred to colloquially as "interest on interest," is the dominant model in modern [finance](/en…