Chapter 10 Key Terms

Question	Answer
Adjusted Balance	The balance after partial payment less interest is subtracted from the principal
Banker's Rule	Time is exact days/360 in calculating simple interest
Exact Interest	Calculating simple interest using 365 days per year in time
Interest	Principal x Rate x Time
Maturity Value	Principal plus interest. Represents amount due on the due date
Ordinary Interest	Calculating simple interest using 360 days per year in time
Principal	Amount of money that is originally borrowed, loaned, or deposited
Simple Interest	Interest is only calculated on the principal. In I=P x R x T, the interest plus original principal equals the maturity value of an interest-bearing note
Simple interest Formula	Interest= Principal x Rate x Time
Time	Expressed as years or fractional years, used to calculate simple interest
U.S. Rule	Method that allows the borrower to receive proper interest credits when paying off a loan in more than one payment before the maturity date

Resource summary

	Created by Eli Southard over 2 years ago