What is the formula for calculating simple interest?

The formula for calculating simple interest is I = PRT, where I represents the interest earned, P is the principal amount (the initial amount of money), R is the annual interest rate (expressed as a decimal), and T is the time the money is invested or borrowed (usually in years). This formula reflects the straightforward relationship between these three variables in calculating the total interest over a given period.

Simple interest is a method used primarily in financing where interest is calculated solely on the original principal amount for the duration of the loan or investment. This makes the calculations direct and easy to follow, as they do not involve compounding.

The other options do not accurately represent the relationship required to calculate simple interest. For example, adding principal and a product of rate and time does not correctly yield the interest earned but rather a sum of the principal and interest. Similarly, the options with fractions misrepresent the fundamental concept of simple interest by not adhering to the structure required to calculate the total interest based on the initial amount, the rate, and the duration.