Chapter 10

Question	Answer
Interest	Principal x Rate x Time
Principal	Amount of money that is originally borrowed, loaned, or deposited.
Maturity Value (MV)	Principal plus interest (if interest is charged). Represents amount due on the due date.
Simple Interest	Interest is only calculated on the principal. In I=PxRxT, the interest plus original principal equals the maturity value of an interest-bearing note.
Simple Interest Formula	Simple Interest (I) = Principal (P) x Rate (R) x Time (T)
Exact Interest	Calculating simple interest using 365 days per year in time.
Time	Expressed as years of fractional years, used to calculate simple interest.
Ordinary Interest	Calculating simple interest using 360 days per year in time.
Banker's Rule	Time is exact days/360 in calculating 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.
Adjusted Balance	The balance after partial payment less interest is subtracted from the principal.

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