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Simple interest has a simple formula: Every period you earn P * r (principal * interest rate).
It is an opportunity for us to reflect on the language and ideas that represented each year.
Most interest explanations stop there: here’s the formula, now get on your merry way. But you don’t need to follow that pace for a full year!
If you grew for 6 months, you should be entitled to . Each year that blue contributes (in green) to our total amount.
I imagine the blue principal “shoveling” green money upwards every year.
However, this new, green money is stagnant — it can’t grow! Only the original 0 can do “work” to generate money.