Which of the following is true for the calculation of simple interest?

The calculation of simple interest is fundamentally based on the relationship between three key components: the principal amount, the interest rate, and the time period for which the money is borrowed or invested. Simple interest is determined using the formula:

[ \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} ]

This formula highlights how interest accrues directly as a function of each of these variables. If you change the principal amount, for example, the total interest will change proportionally. Similarly, increasing the interest rate or the time period will also increase the interest earned or paid in direct relation to the amounts. Thus, the correct answer reflects the core principle that simple interest is calculated through a direct relationship between the principal, the interest rate, and the time involved. This clarity in the interaction of these components is essential for understanding how simple interest functions.