Simple Interest is the interest paid on the principal amount alone. Simple interest is normally used for a single period of less than a year, such as 30 or 60 days.
Example: You borrow $10,0000 for 3 years at 5% simple annual interest.
interest = p * i * n = 10,000 * .05 * 3 = 1,5000
Example 2: You borrow $20,000 for 60 days at 5% simple interest per year (assume a 365 day year).
interest = p * i * n = 10,000 * .05 * (60/365) = 164.384