FBLA Financial Math Terms
depreciation
a reduction in the value of an asset with the passage of time, due in particular to wear and tear.
deductibles
amount of $ that must be paid before an insurance company will pay a claim
disposable personal income
amount of money that households have available for spending and saving after income taxes have been accounted for
deductible
amount you need to pay before the insurance overs it
down payment
an initial payment made when something is bought on credit
APR
annual percentage rate
52
approx how many weeks in a year
whole life insurance
combines life insurance protection with savings
claim
formal request to an insurance company asking for a payment based on the terms of the insurance policy
total benefits - net expenses = net benefits
formula for net benefits
compound interest
interest also earns interest
markup
margin, gross profit, the difference between the cost and the selling price
cost + markup = selling price
markup formula
international system of units
metric system
simple interest
only earn interest on your starting principal
principal
original sum invested
finances
provide/ pay for something
def and calculate straight line depreciation
spread cost over life of fixed asset deduct salvage value SL = Cost/Life
types of depreciation
straight line accelerated (declining balance and sum of years)
subtrahend
the # that is to be subtracted
cash value
whole-life insurance builds up this money used to pay retirement benefits to be insured - can be borrowed at favorable interest rates
minuend
# from which another # will be subtracted
markup
% increase when a store increases price of product from what they bought it for to make a profit
weighted average
1)multiply data by weight 2) add weight 3) divide
a time and a half
1.5 times the normal wage rate
3/10 net 30
3% discount if paid in 10 days, due in 30 days
Declining balance depreciation
Depreciation rate is multiple of straight line methos
sum of years
Digits of each year deduct salvage value (base depreciation) (Digit of year/ total years)