12 Questions
What does the borrower have to compensate for when paying interest?
The time the lender was deprived of using the money
Which of the following is NOT one of the factors of simple interest?
Interest Expense (IE)
What is the formula to calculate simple interest?
$I = Prt$
What does 'Actual time' refer to in interest calculations?
Obtained by counting the actual number of days between two given dates
What is 'Simple Discount'?
Interest collected in advance from the amount of loan
What is a 'Simple Interest Note' used for?
$Drawer & Drawee$
What is the term used to describe the note in which the loan interest is deducted in advance?
Treasury Bill
How often is interest calculated in the scenario of compounding semiannually?
2x a year
Which term refers to the single payment made at the end of a loan period?
Balloon payment
What does the time value of money allow in finance?
Comparison of cash flows from different periods
In finance, what does the term 'Present value' involve?
Discounting to today’s value
Which term describes the situation where a depositor earns interest on interest based on its compounding period?
Compound interest
Learn about the concept of interest, lenders, and borrowers in financial transactions. Explore why interest is charged and how it impacts borrowing and lending decisions.
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