Also, a fee paid for the use of loaned money. Interest is usually expressed as a percentage of the principal, the amount loaned. There are two types of interest: simple interest, where interest is paid only on the original principal amount, and compound interest, where interest is also paid on interest earned. As far as money-lending goes, simple interest is very seldom used - most lenders use the much more profitable technique of interest calculation that is compound interest. The fixed income markets (bonds, debentures, etc.) are based around financial instruments that pay regular interest.