If you borrow money you will be charged. If you deposit money you will be paid, this is....
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Proceeds
The amount of money that you actually receive in a discounted loan.
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Ordinary Annuity
An annuity in which payments are made at the end of the time periods of compounding.
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Effective yield
The interest rate that you actually pay on a discounted loan.
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Maturity Value
The amount of money that you pay back in a discounted loan.
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Amortized loan
A loan in which both principal and interest are paid off by a sequence of equal periodic payments.
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compound interest
interest earned on both the principal amount and any interest already earned
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Quarterly
Occurring or made at intervals of three months. (4 times per year)
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Discounted loan
A loan in which the calculated interest payment is subtracted, or discounted, in advance. Because this lowers the amount of available funds, the effective interest rate is increased.
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Semi-annually
twice a year
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Annuity
a series of equal regular deposits
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Term
Time from the beginning of the first time period in an annuity to the end of the last time period.
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Sinking Fund
An account that is made for accumulating money for a future need.
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Periodic payments
Payments are made at regular intervals.
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Equity
Money accumulated over time in a sinking fund.
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Future value
The amount of money in an account after time has past.
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Principal
An initial sum of money that you either borrow from or deposit into an account.
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Flashcard (20)