economy ch. 3 25/26

TW2

interest

the compensation for lending out money → extra money you get for lending out money to another

median

middle value of numbers from small to large

(25-24-23-23-23-22-22-21 → 23 is the median)

calculating average

all amounts saved/amount of amounts

inflation

increase in prices / money is worth less because there is a lot of it

purchasing power

if interest and inflation are equal

→ this comes to 0 → you didnt get your compensation yet, so u get higher interest rate than inflation rate

Yield

the money you get after investing on it

investment account

you can convert your savings into investments here → higher yield

calculate percentage of part of a whole

part / whole x 100%

calculate from part to whole

percentage / percentage x 100

euro / percentage x 100

calculate change in percentages

new-old / old x 100%

compound interest

interest you get at the end of the year, which includes the interest of last year (new interest on old interest)

factor of growth

how much an amount has grown

(100% + 4% = 104% or 1.04 → factor of growth)

calculation compound interest (with permanent factor of growth)

1000 x factor of growth ^ amount of years

(ex. in 5 years: 1000 × 1.04 ^5) or

end value after n periods = initial value x (1+i)^n

relative changes

percentage of change

percentage point

the absolute difference between values in percentages

(2.5% → 3% = 0.5 percentage points)

repaying

paying back

mortgage loan

a loan with a house as security →

no paying this loan and interest = house sold

personal loan

loan from the bank for personal purchases (ex. car)

instalment buying

paying for the object in pieces; not all at once

continuous credit

you can borrow money up to how much you want (with agreed maximum)

overdrawn

negative balance in bank account (rood staan)

-does not last long (you borrow money) but:

-interest rate is here much more than normal