$I = P\,r\,t$ — read aloud: I equals P r t. The interest $I$ is what the money earns; $P$ is the principal, the money doing the earning; $r$ the yearly rate; $t$ the years. Simple interest pays on the principal ALONE — year three earns exactly what year one did. No snowball.

And the named trap of every financial page in existence: the percent sign is a disguise for ÷100. Five percent is 0.05, and a formula only ever eats the decimal. Feed it a naked 5 and every answer arrives a hundred times too rich — a slip your bank has never once made in your favour. Enter rates as decimals; report them as percents; never confuse the costume with the number.