3.6 Vocab

Question 1

Compound Interest

Answer 1

interest paid on interest previously earned

Question 2

interest paid on interest previously earned

Answer 2

Compound interest

Question 3

Principal

Answer 3

the initial amount of money invested or borrowed

Question 4

the initial amount of money invested or borrowed

Answer 4

Principal

Question 5

Rate of return

Answer 5

the measure of an investment’s profit or loss, usually expressed as a percentage of the initial investment

Question 6

the measure of an investment’s profit or loss, usually expressed as a percentage of the initial investment

Answer 6

Rate of return

Question 7

inflation

Answer 7

the persistent rise in the cost of goods and services over time

Question 8

the persistent rise in the cost of goods and services over time

Answer 8

inflation

Question 9

Time value of money

Answer 9

concept that an amount of money is worth more today than in the future due to earning potential

Question 10

concept that an amount of money is worth more today than in the future due to earning potential

Answer 10

Time value of money