ILLUSTRATE SIMPLE & COMPOUND INTEREST Flashcards
1
Q
people or Institution who lends money
A
LENDER/CREDITOR
2
Q
person or institution who borrows money from the lender
A
BORROWER/DEBITOR
3
Q
date when the money borrowed
DD/MM/YYYY
A
ORIGIN/LOAN DATE
4
Q
date when the borrowed money is already paid
A
5
Q
gap on how long between the origin and repayment date
usually in years
A
TIME/TERM
6
Q
amount of money borrowed
A
PRINCIPAL (P)
7
Q
charge or interest annually
A
RATE (r)
8
Q
profit
A
INTEREST
9
Q
2 TYPES OF INTEREST
A
- SIMPLE INTEREST
- COMPOUND INTEREST
10
Q
interest on the principal only
A
SIMPLE INTEREST
11
Q
interest on the principal and previous interest or outstanding interest
A
COMPOUND INTEREST
12
Q
principal + interest
A
MATURITY/FUTURE VALUE (F)
13
Q
FORMULA FOR SIMPLE INTEREST?
A
I=Prt
14
Q
SA COMPOUND INTEREST
FORMULA FOR FINAL AMOUNT
A
A=P(1+r/n)^nt
15
Q
SA COMPOUND INTEREST
A STANDS FOR?
A
FINAL AMOUNT
