econ ch1

Question 1

refers to any medium of exchange that is widely accepted in the payments of goods or services and/or in settlement of debts.

Answer 1

money

Question 2

is the amount of money paid for the use of money called capital for a certain period of time or the income produced by money which has been loaned.

Answer 2

interest

Question 3

is the interest to be paid which is proportional to the length of time the principal is used.

Answer 3

simple interest

Question 4

types of simple interest

Answer 4

1. ordinary simple interest
2. exact simple interest

Question 5

computed based on banker’s year

Answer 5

ordinary simple interest

Question 6

computed based on exact number of days

Answer 6

exact simple interest

Question 7

is a simple graphical representation of cash flows drawn on a time scale. It is used to simplify problems having diverse receipts and disbursements

Answer 7

cash flow diagram

Question 8

is a written promise of a person or business (as maker) to pay another person or business (payee) within a specified period of time.

Answer 8

promissory notes

Question 9

types of notes

Answer 9

1. Simple Interest Note
2. Bank Discount Note

Question 10

is a note where the value is stated on the note (face value) which corresponds to the principal amount, the total amount to be repaid (maturity value of the note), and the date to which the amount is due (maturity date)

Answer 10

simple interest note

Question 11

is a note where the value is stated on the note corresponds to the maturing amount to which the interest is being calculated and is deducted in advance. (The amount received by the maker is proceeds)

Answer 11

bank discount note

Question 12

is the difference between the present worth and the future worth

Answer 12

discount

Question 13

is the interest earned by the principal which is added to the principal to earned an interest in the succeeding period.

Answer 13

compund interest

Question 14

types of rate of interest

Answer 14

1. Nominal rate of interest
2. effective rate of interest

Question 15

specifies the rate of interest and a number of interest periods in one year

Answer 15

nominal rate of interest

Question 16

is the actual or exact rate of interest on the principal during one year

Answer 16

effective rate of interest

Question 17

is obtained by setting the sum of the values of a certain comparison / data to a single date point (known as the time reference).

Answer 17

equation value