INTEREST AND INVESTMENT
View linked note
Call Kai
Learn
Practice Test
Spaced Repetition
Match
Flashcards
Knowt Play1/15
There's no tags or description
Looks like no tags are added yet.
Name | Mastery | Learn | Test | Matching | Spaced | Call with Kai |
|---|
No analytics yet
Send a link to your students to track their progress
16 Terms
Interest
The cost of borrowing money or the return on investment.
Simple Interest
Interest calculated only on the principal amount.
Compound Interest
Interest earned on both the principal and previously earned interest.
Compounding Interest
The process of applying compound interest over multiple periods.
Ordinary Interest
Interest calculated based on a 360-day year.
Nominal Rate of Interest
Stated interest rate, not accounting for compounding.
Equivalent Nominal Rate
Converts interest rate from one compounding frequency to another but keeps the nominal annual rate consistent.
Effective Rate of Interest
Actual interest rate accounting for compounding.
Effective Interest Rate for Continuous Compounding
Interest rate under the assumption of continuous compounding.
Continuous Compounding
Compounding that happens infinitely frequently in a given period.
Return of Investment (ROI)
Percentage of gain or loss relative to the investment.
Rate of Return
Profit or loss on an investment as a percentage of its cost.
Investment Cost
The initial cost of purchasing an asset or starting a project.
Working Capital
The short-term funds required to maintain daily operations.
What is Simple Interest?
Interest calculated only on the principal amount.
What is Compound Interest?
Interest earned on both the principal and previously earned interest.
