Retrieving "Simple Interest" from the archives

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1. Interest

   Linked via "Simple interest"

   Simple vs. Compound Interest
   Simple interest accrues solely on the original principal amount. This method is often utilized for short-term lending or specific contractual obligations where the accretion of earnings is explicitly disallowed.
   Compound interest, conversely, is calculated on the principal plus any previously accumulated interest. This mechanism, sometimes referred to colloquially as "interest on interest," is the dominant model in modern [finance](/en…

2. Interest Payments

   Linked via "simple interest"

   Calculation and Terminology
   The fundamental calculation of interest is typically expressed as a percentage of the principal amount, known as the interest rate ($r$). For simple interest, the total interest accrued ($I$) over a period $t$ on a principal $P$ is given by:
   $$ I = P r t $$