Flashcards
Key Terms: Chapter 10- Simple Interest
Cards in this deck (11)
- 1Adjusted balanceThe balance after partial payment less interest is subtracted from the principal.
- 2Banker's ruleTime is exact days/360 in calculating simple interest.
- 3Exact interestCalculating simple interest using 365 days per year in time.
- 4InterestPrincipal × Rate × Time
- 5Maturity valuePrincipal plus interest (if interest is charged). Represents amount due on the due date.
- 6Ordinary interestCalculating simple interest using 360 days per year in time.
- 7PrincipalAmount of money that is originally borrowed, loaned, or deposited.
- 8Simple interestInterest is only calculated on the principal. In I = P × R × T, the interest plus original principal equals the maturity value of an interest-bearing note.
- 9Simple interest formulaI = P × R × T
- 10TimeExpressed as years or fractional years, used to calculate simple interest.
- 11U.S. ruleMethod that allows the borrower to receive proper interest credits when paying off a loan in more than one payment before the maturity date.