Interest can be calculated in different ways depending on the type of loan or investment. Simple interest is straightforward—it’s calculated only on the original principal, making it easy to predict total payments or returns. Compound interest takes a different approach by factoring in previously earned interest, allowing balances to grow at a faster pace over time. Flat interest is often seen in some personal or auto loans, where interest is applied evenly across the original amount regardless of how much has been repaid. Annualized interest expresses the rate on a yearly basis, helping consumers compare different financial products. Each method affects how much you earn or owe, and small differences in structure can lead to big impacts over the life of a loan or investment. Understanding these variations empowers you to compare options more clearly and make informed decisions about borrowing or saving.