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# 8.21: Simple Interest

Difficulty Level: Basic Created by: CK-12
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Estimated9 minsto complete
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Estimated9 minsto complete
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### Vocabulary Language: English

Annually

An event occurs annually if it happens once per year.

Compound interest

Compound interest refers to interest earned on the total amount at the time it is compounded, including previously earned interest.

future value

In the context of earning interest, future value stands for the amount in the account at some future time $t$.

Percent

Percent means out of 100. It is a quantity written with a % sign.

present value

In the context of earning interest, present value stands for the amount in the account at time 0.

Simple Interest

Simple interest is interest calculated on the original principal only. It is calculated by finding the product of the the principal, the rate, and the time.

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