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)