Answer:
Simple interest is the cost of using or borrowing money without compound interest or interest on interest. It's relatively easy to calculate since you only need to base it on the principal amount of money borrowed and time period.
Simple interest works in your favor when you're a borrower because it keeps the overall amount that you pay lower than it would be with compound interest. However, it can work against you when you're an investor because you'll want your returns to compound as much as possible to get the most from your investment.
