How to use it
- Identify the interest model.
- For simple interest use I=Prt.
- For compound interest use the stated compounding formula.
See it in action
$1000 at 5% simple interest for 3 years: I=1000×0.05×3=$150.
How to verify it
Total is $1150.
Common mistake
Do not use simple-interest shortcuts for a compounding account.