Questions and Answers
What is the ending balance formula?
Pe^rt
What does APY stand for and how is it calculated?
(1+(r/n))^n - 1
What is the formula for simple interest?
I = prt
What is the formula for compound interest?
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What does Q2 refer to in statistics?
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What is the definition of median?
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What is the formula for the interquartile range?
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Study Notes
Financial Algebra Key Terms
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Ending Balance: Represents the final amount in an account after interest is applied, derived from the formula Pe^rt, where P is the principal, r is the rate, and t is the time.
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APY (Annual Percentage Yield): Measures the real rate of return on an investment, accounting for compounding over one year, calculated using (1+(r/n))^n -1, where r is the interest rate and n is the number of compounding periods.
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Simple Interest: A method to calculate interest based solely on the principal amount; calculated with the formula I=prt, where I is interest, p is principal, r is rate, and t is time.
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Compound Interest: Interest calculated on the initial principal and also on the accumulated interest from previous periods, expressed with the formula B=P(1+r/n)^nt, where B is the total balance, P is the principal, r is the interest rate, n is the number of compounding periods per year, and t is time in years.
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Q2 (Second Quartile): Refers to the median in a data set, which divides the data into two equal halves.
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Median: The middle value in a sorted data set, providing a measure of central tendency.
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Interquartile Range (IQR): The difference between the third quartile (Q3) and the first quartile (Q1), measuring the spread of the middle 50% of the data.
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Test your understanding of essential financial algebra formulas with these flashcards. Each card presents a key term along with its mathematical definition, perfect for students looking to solidify their financial literacy. Master concepts like ending balance, APY, and interest calculations effectively.
