## Key Concepts

**Simple interest**- If an amount of money, [latex]P[/latex] , the principal, is invested for a period of [latex]t[/latex] years at an annual interest rate [latex]r[/latex] , the amount of interest, [latex]I[/latex] , earned is [latex]I=Prt[/latex]
- Interest earned according to this formula is called simple interest.

## Glossary

- simple interest
- If an amount of money, [latex]P[/latex] , the principal, is invested for a period of [latex]t[/latex] years at an annual interest rate [latex]r[/latex] , the amount of interest, [latex]I[/latex] , earned is [latex]I=Prt[/latex] . Interest earned according to this formula is called simple interest.

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