Unit 5 Time Value of Money Flashcards
1
Q
Compound Interest
A
Interest accrues on the unpaid interest of past periods as well as on the principal.
2
Q
Interest
A
Payment for the use of money.
3
Q
Principal
A
The amount borrowed or invested.
4
Q
Simple Interest
A
Interest on principal only, regardless of interest that may have accrued in the past.
5
Q
Time Value of Money
A
The relationship between time and money.
