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To calculate interest, you can use the following formula:
Interest = Principal amount * Interest rate * Time period
Where:
- Principal amount is the initial amount of money invested or borrowed
- Interest rate is the annual interest rate (in decimal form)
- Time period is the number of years the money is invested or borrowed for
For example, if you have $1000 invested at an annual interest rate of 5% for 2 years, the interest would be calculated as follows:
Interest = $1000 * 0.05 * 2 = $100
So, the total amount after 2 years would be $1100.
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