## simple interest formula

### The formula for simple interest can be expressed as:

I = P * r * t

Where:

I = Interest

P = Principal amount (initial amount of money)

r = Interest rate (expressed as a decimal)

t = Time (in years)

To calculate the simple interest, you need to multiply the principal (P), the interest rate (r), and the time (t) together

The formula for simple interest can be expressed as:

I = P * r * t

Where:

I = Interest

P = Principal amount (initial amount of money)

r = Interest rate (expressed as a decimal)

t = Time (in years)

To calculate the simple interest, you need to multiply the principal (P), the interest rate (r), and the time (t) together.

For example, let’s say you make an investment of $5000 at an annual interest rate of 6% for a period of 2 years. Using the formula, you can calculate the simple interest as follows:

I = 5000 * 0.06 * 2

I = 600

So, the simple interest earned on your investment would be $600.

It’s important to note that simple interest does not take compounding into account. Compounding refers to the process where interest is added to the principal and subsequent interest calculations are based on the new total. Simple interest, on the other hand, only calculates interest based on the original principal amount.

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