Flashcards
Key Terms for Chapter 10: Simple Interest
Cards in this deck (11)
- 1Adjusted BalanceBalance after partial payment less interest is subtracted from the principal
- 2Banker's RuleThe use of the ordinary interest method
- 3Exact InterestUsed by the Federal Reserve banks and the federal government. Uses a 365 day year
- 4InterestThe cost of borrowing money
I=PxRxT - 5Maturity ValueAmount due on the due date
MV=P+I - 6Ordinary InterestUses a 360 day calendar (Used by banks)
- 7PrincipalAmount of money that is originally borrowed, loaned, or deposited
- 8Simple InterestThe cost of the loan, usually for 1 year or less
- 9Simple Interest FormulaI=PxRxT
- 10TimeUsed to calculate simple interest, and expressed as years or fractional years
- 11US RuleMethod that allows the borrower to receive proper interest credits when paying off a loan in more than one payment before maturity date
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- Key Terms for chapter 10: Simple Interest
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- Kyra Louthan
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