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.
Licenses and Attributions
CC licensed content, Specific attribution
Prealgebra. Provided by: OpenStax. License: CC BY: Attribution. License Terms: Download for free at http://cnx.org/contents/caa57dab-41c7-455e-bd6f-f443cda5519c@9.757