Simple Interest

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Formula for Simple Interest

I = PxRxT

Compound Interest

Interest paid for principal and the interest already earned

Principal

Money borrowed or money invested

Simple Interest

Money paid only on principal, or money borrowed or invested

Total Amount

Principal + Interest = Total Amount

Rate

The percent of principal charged or earned

Time

The time that the money was invested in years. 6 months is 1/2 a year 3 months is 1/4 of a year etc.


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