LOANS VOCABULARY AND SIMPLE INTEREST

I = P * r * t, where I is interest, P is principal, r is rate (as a decimal), and t is time (in years).

$150

P represents the principal amount, or the initial amount of money invested or borrowed.

r represents the annual interest rate expressed as a decimal.

Divide the percentage by 100. For example, 4.3% becomes 0.043.

Time (t) is the duration for which the money is invested or borrowed, measured in years.

The interest rate is 1.2%.

Simple interest is calculated only on the principal amount, while compound interest is calculated on the principal plus any interest earned.

It ensures accurate calculations, as the formula requires the rate in decimal form.

You may save more money in the long run by avoiding high rental costs and building equity.