Chapter 1 Vocabulary - Quantitative Reasoning

1.1 - Functions, 1.2 - Analytical Representatives: Equations, 1.3 - Numerical and Graphical Representations: Tables and Charts

Function

A relationship between quantitites referred to as inputs and outputs.

Inputs

Also known as domains, they are known as independent variables (x-values).

Outputs

Also known as the range, they are variables that depend on the domains.

Constant Function

A function where the output remains the same regardless of the input values.

Domain

The set of all possible input values that a function can produce.

Range

The set of all possible output values that a function can produce.

One-to-one (1-1) Function

A type of function where every input corresponds to exactly one unique output.

Principal (P)

The original amount of money borrowed or invested.

Interest

The amount of money that you can either earn or pay for the use of money.

Period (n)

The amount of times in one year that interest is calculated.

Balance

The net worth of money.

Interest Rate

The percentage cost to borrow money from a lender.

Annual Percentage Rate (APR)

The annual rate of interest charged on a loan or earned on an investment.

Periodic Rate

The interest rate for a specific period (daily, weekly, or monthly) calculated using the formula $\frac{\text{APR}}{n}$.

Annual Percentage Yield (APY)

The effective annual interest rate, calculated using the formula $\frac{\text{Total Interest in 1 Year}}{\text{Original Principal}}$.

Relative Cell Reference

An Excel reference like $A4$ that changes the row number when filled up or down and changes the column letter when filled left or right.

Mixed Cell Reference ($A4)

An Excel reference that changes the row number when filled up or down but fixes the column letter when filled left or right.

Mixed Cell Reference (A$4)

An Excel reference that fixes the row number when filled up or down but changes the column letter when filled left or right.

Absolute Cell Reference

An Excel reference like $\$A\$4$ that fixes both the row number and the column letter when filling in any direction.

Fill Handle

A small square at the bottom-right corner of a cell selection used to quickly copy formulas down or across a spreadsheet.

PMT (Periodic Payment) Inputs

The output of the four required inputs to calculate a fixed payment: Principal ($P$), APR, Number of periods in 1 year ($n$), and Number of years of the loan ($t$).

Order of Operations

The standard mathematical hierarchy for solving expressions, applied in Excel formulas like $2-8/4+6\times2$.

Payment Formula

The analytic representation used to find periodic payments: $\text{PMT} = \frac{P \times \left(\frac{\text{APR}}{n}\right)}{1 - \left(1 + \frac{\text{APR}}{n}\right)^{-n \times t}}$.