genmath quarter 2 simple and compound interest terminologies

Interest

It is the amount paid or earned for the used of money.

Simple Interest

It is an interest that is computed on the principal. The interest remains constant throughout the term.

Compound Interest

It is the interest computed on the principal and on the accumulated past interest, so compound interest is a way to earn money because you don't just earn using your original money, but also the interest you earned

Lender / Creditor

A person (or institution) who invests the money or makes the funds available.

Borrower / Debtor

A person (or institution) who owes the money or avails of the funds from the lender.

Origin date / Loan Date

It is the date on which money is received by the borrower.

REPAYMENT/ FUTURE DATE

It is the date on which the money borrowed, or loan is to be completely repaid.

Principal

It is an amount of money borrowed or invested on the origin date.

Time or term

It is an amount of time in years the money is borrowed or invested; length of time between the origin and maturity dates.

Rate

It is an annual rate, usually in percent, charged by the lender, or rate of increase of the investment.

Maturity / Future Value

It is the amount after t years that the lender receives from the borrower on the maturity date.