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A ratio that compares a number to 100

Percent of change

The percent a quantity increases or decreases from its original amount


The original amount deposited or borrowed

Interest Rate

The rate, usually expressed as a percent, used to calculate interest


The amount of money paid for the use of borrowed money


The principal plus the interest earned

Simple Interest

The interest calculated only on the principal

Formula for Simple Interest

I = prt (Interest - principal • rate • time)

Compound Interest

Interest that is paid on both the principal and also on any interest from past years.

Formula for Compound Interest

B = P(1 + r)n (Balance = Principal (1 + rate) ^ time

What is the difference between Compound and Simple Interest?

Simple interest is only calculated on the original balance, but compound interest is calculated on the principal plus the annual balance

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