Simple interest is a method of calculating the interest charge on a loan or investment based solely on the original principal amount, or the initial sum of money. It is calculated using the formula: $$I = P imes r imes t$$, where I is the interest, P is the principal, r is the annual interest rate, and t is the time in years. Understanding simple interest is crucial for evaluating how money grows over time and assessing various financial products and loans.
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