Definition of Terms

Question 1

Person or institution who makes the funds available

Answer 1

Lender or creditor

Question 2

Person or institution who owes the money

Answer 2

Borrower or debtor

Question 3

Date or which the money is received by the borrower

Answer 3

Origin or loan date

Question 4

Date on which the money borrowed, or loan is to be completely repaid

Answer 4

Repayment or maturity date

Question 5

Length of time between origin and maturity date

Answer 5

Time or term

Question 6

Amount of money borrowed

Answer 6

principal

Question 7

Annual rate charged by the lender, usually in percent

Answer 7

Rate

Question 8

Amount paid or earned for the use of money

Answer 8

Interest

Question 9

Interest that is computed on the principal and then added to it

Answer 9

Simple interest

Question 10

Interest is computed on the principal and also on the accumulated past interest

Answer 10

Compound interest

Question 11

Amount after t years that the lender receives from the borrower on the maturity date

Answer 11

Maturity value or future value