Studied by 9 peopleInterest
An amount charged to a borrower that is usually present in loans, credit cards, investments, and bank accounts.
Simple and Compound Interest
The two types of interest.
Principal
The amount borrowed or invested in a loan.
Ordinary Interest
Interest that runs on a 360-day calendar.
Exact Interest
Interest that runs on a 365-day calendar.
Annually
Compounding period that compounds every year with n = 1.
Semi-annually
Compounding period that compounds every 6 months with n = 2.
Quarterly
Compounding Period that compounds every 3 months with n = 4.
Monthly
Compounding Period that compounds every month with n = 12.
Future Value/Maturity Value
The total amount at the end of the term with interest.
Present Value
Principal needed to be invested now to provide regular payments for an annuity.
Annuity
A sequence of fixed payments made at equal intervals that is subject to compound interest.
Simple Interest
Interest charged only on the loan or investment amount.
Compound Interest
Interest due at the end of a certain period is added to the principal and the sum earns interest for the next period.
Certain Annuity
Annuity that is payable within a definite duration.
Uncertain Annuity
Annuity that is payable within an indefinite duration.
Simple Annuity
Annuity wherein the compounding period is equal or the same as the payment interval.
General Annuity
Annuity wherein the compounding period differs from the payment interval.
Ordinary Annuity
Annuity wherein the periodic payments are paid at the end of the payment interval.
Annuity Due
Annuity wherein the periodic payments are paid at the beginning of the payment interval.
Amortization
The gradual extinction of a loan over a period of time through a series of regular payments due at the end of each payment period.
Amortization Schedule
A table showing how the borrower repays the loans with interest over time with regular payments.
Deferred Annuity
Annuity that delays the start of payments until an agreed upon date.
Period of Deferment
The length of time between a loan’s release and the first payments in Deferred Annuity.
Bond
A promissory document issued by the debtor stating the amount of debt and a pledge to repay the loaned amount.
Face Value
The price of a bond.
Maturity
The time period until the loan is paid back in a bond.
Coupon
Periodic payment that the bondholder receives between the purchase date of the bond and its maturity date.
Coupon Rate
The interest rate of the bond.
Term of a Bond
A fixed period of time in years at which the bond is redeemable.
Stocks
Equity securities that represent a share or portion in a company. This is an investment instrument used to build wealth.
Dividend
Part of a company’s profit that is distributed to the stockholders.
Dividend per Share
The ratio of the dividend to the number of shares.
Stockholder’s Dividend
The profit of the stockholders.
Market Value.
The price of a stock in the current market.
Stock Yield
The ratio of Dividend per Share and Market Value per share.
Par Value
Per share amount stated on the company certificate that remains stable over time.
Efficient Market Theory
Theory stating that the stock market reacts very fast to any information, and that the market contains the total views of all the investors in the market. It also stipulates that the current price of the stock is the accurate reflection of the knowledge of the stockholders about the stock.
Stock Market Index
The measure of the value of a section of the stock market computed from the price of selected stocks.
Business Loan
Loan lent to companies and corporations to fund their businesses.
Consumer Loans
Loan lent to individuals for personal expenses.
Term Loan
Long-term or short-term business loan that lends the loan amount in a lump sum credited to borrower’s deposit account.
Credit Line
A short-term business loan that provides quick access to money demand. Loan is valid for 1 year and can be renewed.
Secured Business Loan
Business loan with lower interest rates, longer loan terms, and higher loan amounts that requires collateral.
Unsecured Business Loan
Business loan with higher interest rates, shorter loan terms, and lower loan amounts that does not require collateral and is harder to qualify for.
Mortgage
Consumer loan used to finance real estate purchases.
Auto Loan
Consumer loan used to finance automobile or vehicular purchases.
Credit Card
Consumer loan used to finance everyday purchases.
Student Loans
Consumer loan used to finance education.
Proposition
A declarative sentence that can either be true or false with its truth value being denoted with either T or F.
Simple Proposition
Proposition that cannot be broken down into other component propositions.
Compound Proposition
Simple propositions combined with logical connectors.
Negation
Denoted with ~
not p.
Conjunction
Denoted with ^
p and q
Disjunction
Denoted with v
p or q
Conditional
Denoted with →
if p then q
Biconditional
Denoted with <--→
p if and only if q
Note 
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