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Why do you immediately pull your hand away from something hot?
Simple Interest
Interest assessed only on the principal sum, or on the part of the principal that still needs to be repaid.
Principal Amount
The original sum of money borrowed in a loan or invested, distinct from interest or profit earned.
Invested
To be invested refers to the allocation of resources, such as capital or time, into a particular venture, asset, or effort with the expectation of generating a future return.
Present Value Equation
A mathematical formula used to determine the current value of a future amount of money or stream of cash flows given a specific rate of return.
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