Studied by 254 peopleInterest
If you borrow money you will be charged. If you deposit money you will be paid, this is....
Proceeds
The amount of money that you actually receive in a discounted loan.
Ordinary Annuity
An annuity in which payments are made at the end of the time periods of compounding.
Effective yield
The interest rate that you actually pay on a discounted loan.
Maturity Value
The amount of money that you pay back in a discounted loan.
Amortized loan
A loan in which both principal and interest are paid off by a sequence of equal periodic payments.
compound interest
interest earned on both the principal amount and any interest already earned
Quarterly
Occurring or made at intervals of three months. (4 times per year)
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.
Semi-annually
twice a year
Annuity
a series of equal regular deposits
Term
Time from the beginning of the first time period in an annuity to the end of the last time period.
Sinking Fund
An account that is made for accumulating money for a future need.
Periodic payments
Payments are made at regular intervals.
Equity
Money accumulated over time in a sinking fund.
Future value
The amount of money in an account after time has past.
Principal
An initial sum of money that you either borrow from or deposit into an account.
Note
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