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  • What it is for: Calculates the amount of interest on a principal, whether simple or compound interest, based on the interest rate and the period of time.

  • How it works: For simple interest, interest is calculated only on the initial principal, while in compound interest, interest is calculated on the initial principal and any previously accrued interest.

  • Calculation: Simple interest: Multiply the initial principal by the interest rate and the period of time. Compound interest: Apply the interest rate to the initial principal and the interest accumulated over time.

  • Usage: Useful for calculating interest on savings, loans, mortgages, bonds, and other forms of investment or financing.

  • Formula: Simple interest: Interest = Initial principal * Interest rate * Time. Compound interest: Final amount = Initial principal * (1 + Interest rate) ^ Time

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