Conquer the Mathematics ACT Aspire Test 2025 – Unleash Your Inner Math Genius!

The formula for calculating simple interest is derived from the fundamental concept that interest is a percentage of the principal amount borrowed or invested over a specific time period. The correct formula, which is expressed as Interest = Principal * Rate * Time, accurately reflects this relationship, where:

- Principal refers to the original sum of money.

- Rate is the interest rate (often expressed as a decimal) applicable to the principal.

- Time represents the duration for which the money is borrowed or invested.

In this context, when you multiply the principal by the rate and the time, you are calculating the total interest accrued over that period based on a fixed rate, making it a straightforward calculation.

The other options do not represent the correct relationship for calculating simple interest. They involve operations that do not align with the principles of simple interest calculation, which relies on direct multiplicative relationships rather than addition, division, or incorrect combinations of these factors.