The simple interest formula gives you the interest earned or paid over a specified period of time, not the total value in the account at the end.
The formula for calculating simple interest is:
\[ I = P \times r \times t \]
where:
- \( I \) is the interest earned or paid,
- \( P \) is the principal amount (the initial amount of money),
- \( r \) is the annual interest rate (as a decimal), and
- \( t \) is the time the money is invested or borrowed for (in years).
To find the total value in the account at the end, you would add the interest to the principal:
\[ \text{Total Value} = P + I = P + (P \times r \times t) = P(1 + rt) \]
In summary, the simple interest formula gives you the interest earned or paid, while the total value in the account at the end can be calculated by adding this interest to the principal amount.