Calculate standard interest on loans or savings.
Simple interest I = P × r × t, where P is principal, r is the annual rate, and t is years.
$5,000 at 5% simple interest for 3 years earns $750.
Simple interest is calculated only on the original principal, while compound interest is calculated on the principal plus accumulated interest.
It is common for short-term personal loans, auto loans, and some bonds. Most savings accounts use compound interest instead.
Yes. The rate is an annual percentage, and the time is in years (or fractions of a year).
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