What is the formula for calculating simple interest?

The formula for calculating simple interest is given by I = Prt, where I represents the interest earned, P is the principal amount (the initial sum of money), r is the rate of interest per time period (expressed as a decimal), and t is the time the money is invested or borrowed for, typically in years.

This formula provides a straightforward way to calculate interest without compounding, making it particularly useful for short-term loans or investments. The components of the formula allow you to easily determine how much interest will accumulate over a specific time period at a given rate for a fixed principal amount. This linear relationship reflects that the interest earned is proportional to the time the money is invested or borrowed and the interest rate.

In contrast, the other formulas given do not correctly represent the relationship between the principal, rate, and time for calculating simple interest, making them invalid for this purpose.