Investments and loans base their interest calculations on of two possible methods: the

interest and the

interest methods. Both methods apply three variables$-$the amount of principal, the interest rate, and the investment or deposit period$-$to the

amount deposited or invested in order to compute the amount of interest. However, the two methods differ in their relationship between the variables.

Assume that the variables $r,n,$ and PV represent the interest rate, investment or deposit period, and present value of the amount deposited or

invested, respectively.