Simple Interest and Compound Interest
lend
1. to give something to someone or allow them to use something that belongs to you, which they have to return to you later 2. (formal) to give a particular quality to a person or a situation
income
Earnings from work or investment
Simple Interest Formula
I=P x R x T
MV formula
MV = P(1+RT)
expense
Money spent
principal
The amount of money borrowed or invested
loan
a thing that is borrowed, especially a sum of money that is expected to be paid back with interest.
interest
amount paid or earned for the use of money
budget
an estimate of income and expenditure for a set period of time.
annual
happening once a year
compound interest
interest calculated on both the principal and the accrued interest
I
interest earned (amount of money the bank pays you)
simple interest
interest earned when a loan or investment is repaid in a lump sum
Simple Interest
interest paid on the principal alone
R
interest rate usually given as a percent (this must change to decimal before plugging it into formula)
T
must be measured in years or converted to years by dividing by 12 months
time
number of days, months or years that the money is borrowed or invested
rate of interest
percent for a given time period, usually one year
P
principal amount invested or borrowed
credit
the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.
rate
the percent of the principal paid as interest per time period
save
to set aside money for a later use.
Maturity Value
total amount of money due by the end of a loan period, the amount of loan and interest