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MacroGlide on Instagram: "Simple interest is calculated only on the original principal, while compound interest is calculated on the principal plus all accumulated interest, which is why compounding grows money far faster over time. Simple interest uses the formula I = P × r × t, where P is the principal, r the annual rate, and t the number of years; for example, investing $10,000 at 5% simple interest for 5 years yields $2,500 in interest. Compound interest uses A = P × (1 + r)^t, where A is th
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