13 Questions
What is the term for the length of time between the origin and maturity date of a loan?
Time (t)
What is the term for the amount borrowed on the origin date of a loan?
Principal (P)
What type of annuity has payments made at the beginning of each payment interval?
Annuity Due
What is the term for interest that is computed on the principal and also on the accumulated interest?
Compound Interest
What is the term for shares in the ownership of a company?
Stocks
What is the term for the amount after (t) years in financial calculations?
Future Value
What is the term for the sequence of payments made at equal intervals?
Annuity
What type of annuity has payments made at the end of each payment interval?
Simple Annuity
What is the term for the rate of increase usually in percent?
Rate
What is the term for interest that is computed on the principal and also on the accumulated interest?
Compound Interest
What is the term for the amount after (t) years in financial calculations?
Maturity Value
What is the term for payments extend over an indefinite length of time?
Contingent Annuity
What is the term for the number of payments in a financial calculation?
Number of payments
Study Notes
Loan Terminology
- The term for the length of time between the origin and maturity date of a loan is term of a loan.
- The amount borrowed on the origin date of a loan is called the principal.
Annuity Types
- An annuity due has payments made at the beginning of each payment interval.
- An ordinary annuity has payments made at the end of each payment interval.
Interest Calculations
- Compound interest is interest that is computed on the principal and also on the accumulated interest.
Financial Calculations
- A(t) represents the amount after t years in financial calculations.
- A sequence of payments made at equal intervals is called an annuity.
- The rate of increase is usually expressed in percent.
Investment Terminology
- Shares represent the ownership of a company.
Payment Schedules
- Perpetuity refers to payments that extend over an indefinite length of time.
- The number of payments is a key factor in financial calculations.
Test your understanding of terms related to simple interest, including lender, borrower, origin date, repayment date, principal, rate, and interest. This quiz covers the basic concepts of simple interest calculations and definitions.
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