Simple & Compound Interest Calculations

Simple Interest is the amount of money charged on a loan or earned on an investment over time.

Simple Interest is a complex calculation involving multiple variables.

Simple Interest is the interest calculated on the initial principal and also on the accumulated interest of previous periods.

Simple Interest is a type of interest that compounds monthly.

I = P × R × T

I = P + R + T

I = (P × R) / T

I = P × R × T / 100

Principal amount (initial loan or investment)

Power

Pressure

Perimeter

$1,200

$1,000

$1,500

$1,600

$100

$90

$110

$120

$1100

$1000

$1200

$1050

P = I / (R × T)

P = I × R × T

P = I / R × T

P = I × (R × T)

Always convert interest rates to decimals.

Ignore time units.

Use unclear steps.

By calculating the interest on a loan using the principal amount, interest rate, and time period.

By determining the total loan amount needed for a business.

By assessing the risk factors involved in a business loan.

By evaluating the creditworthiness of a business.

Only the original principal

Only the accumulated interest

Both the original principal and the accumulated interest

None of the above