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## Comment on

Simple Interest and Compound Interest## hi brent..

actually u said the principal interest formula was S.I = (principal*rate*time)

but u only explained that in the beatthegmat prblm S.I = principal*(1+rt).

which formula was correct??

## Sorry, can you please

Sorry, can you please indicate which Beat The GMAT question you're referring to. I checked the links above, and I can't tell which one you mean.

## sorry .. i misunderstood

t= time

p = principal

r= rate

## The formula A=P(1+rt)

The formula A=P(1+rt) computes the TOTAL VALUE of your investment after time t.

The formula S.I = principal*(1+rt) computes the TOTAL INTEREST time t, which you must add to the initial investment (P) to get the TOTAL VALUE.

## hi brent... for finding

C.I= P(1+r)^t. is that correct??

## That formula is for a

That formula is for a specific case where r = the annual interest rate and t = the number of years.

The formula shown in the video accounts for all possible compound interests (compounded monthly, biannually, etc).

## Hi Brent, do you think it is

## The latter method is much

The latter method is much easier, but there have been (on rare occasions) official GMAT questions that test your knowledge of the compound interest formula.

Here's one example: https://gmatclub.com/forum/if-1-were-invested-at-8-percent-interest-comp...

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