Question

i don't understand the chapter simple interest

Answer 1

With simple interest you pay or receive the same amount of money during each time period, and if this lasts for T time periods, then the amount of interest is T times the amount of interest during each time period.

So we have the formula for simple interest.

I=PRT

where

      I is the interest
      P is the principal
      R is the interest rate as a decimal
      T is the number of time periods

To use this formula R and T must be in the same time units.

If the interest rate is per annum then T is in years, if the time period is in weeks then the interest rate must be per week.

The interest is additional money that is paid.

To obtain the total amount of money, A, the interest is added to the principal

A=P+I

where

      A is the total amount of money
      P is the principal
      I is the interest.