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Simple interest: I = P × r × t. Total = P + I. Unlike compound interest, principal doesn't grow—interest accrues only on the original amount. Used for short-term loans, savings bonds, and some car loans. For t in days: use t = days/365 (actual/actual) or days/360 (bank basis). Compound interest always outperforms simple interest for the same rate over the same period.
Simple interest: I = P × r × t (annual rate, time in years). Does not compound.