It is the amount of money that is paid when borrowing another person's money.

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What is the formula for simple interest?

I = P x R x T

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wherein I = Interest, P = Principal, R = Rate, T = Time.

What is an interest rate?

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Interest rate is the amount that charged by lenders to borrowers. It is calculated at a fixed or variable rate for a specific time period.

What is compound interest?

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You may think of compound interest a the interest one earns on interest. It i the result one earns by reinvesting one's interest.

What is the formula for compound interest?

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where P stands for the initial principal balance, r is the interest rate, n is the number of times interest is compounded per time period and t is the number of time periods

P (1 + r/n)^(nt)

"Money makes money. And the money that money makes, makes money."