davidgzz2448 davidgzz2448 26-03-2018 Social Studies contestada What is the difference between simple and compound interest? Simple interest is paid on the principal only; compound interest is paid on both principal and interest. Simple and compound interest are two names for the same thing. Simple interest is paid as long as the money stays in the bank; compound interest is only paid for a year at a time. Simple interest is paid once a year; compound interest is paid at least quarterly.