simple interest Flashcards
person (or institution) who invests the money or makes the funds available
Lender or creditor
person (or institution) who owes the money or avails of the funds from the lender
Borrower or debtor
date on which money is received by the borrower Repayment
Origin or loan date
a date on which the money
borrowed or loan is to be completely repaid
Repayment date or maturity date
amount of time in years the money is borrowed or invested; length of time between the origin and maturity dates
date
Time or term (t)
amount of money borrowed or invested on the origin
Principal (P)
annual rate, usually in percent, charged by the lender, or rate of increase of the investment
rate
amount paid or earned for the use of money
interest
interest that is computed on the principal and then added to it.
Simple Interest (Is)
amount after t years; that the lender receives from the borrower on the maturity date
Maturity value or future value (F)
interest is computed on the principal and also on the accumulated past interests.
Compound Interest (Ic)
the number of times in a year the interest will be compounded,
Conversion period (m)
is the interest computed based on the principal only.
simple interest
assumes that each of the 12 months in a year has
30 days.
Approximate time
counts the exact number of days; hence a year is taken as composed of 365 days.
actual time
