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Hawkins Connections
Algebraic Connections Chapter 8 Vocabulary
Term | Definition |
---|---|
Sales tax | A percent of the cost of an item added to the cost of the item |
Interest | The dollar amount we get paid for lending money or pay for borrowing money |
Rate | Given as a percent and varies from bank to bank |
Discounted loan | Collecting interest on a loan at the time the loan is made |
Future value | The principal plus interest amount or amount due |
Compound interest | Interest computed on original principal as well as accumulated interest |
Installment buying | When you repay a loan for the cost of a product on a monthly basis |
Total installment price | The sum of all monthly payments plus the down payment |
APR | Annual percentage rate per year |
Payoff amount | The total amount due on the day that a loan is paid off early |
Mortgage | A long term loan for the purpose of buying a house |
Variable-rate mortgage | Payments change from time to time depending on the changes in the interest rate (also known as adjustable-rate mortgage) |
Percents | Numbers expressed as a part of 100 (means per 100) |
Discount | A percent of the original price of an item, reducing the cost of the item (also the interest that is deducted from a discounted loan) |
Principal | The amount of money we deposit or borrow (also known as present value) |
Simple Interest | Interest calculated only on the principal |
Banker's rule | Allows financial institutions to use 360 days for 1 year instead of 365 |
Effective annual yield | The simple interest rate that produces the same amount of money in an account at the end of one year as when the account is subjected to compound interest at a stated rate (also known as effective rate) |
Amount financed | The amount the consumer borrows (cash price - down payment) |
Finance charge | The interest on the installment loan |
Unearned interest | The amount by which the finance charge is reduced when a loan is paid off early |
Revolving credit | Open-ended installment loan (most common type is a credit card) |
Fixed-rate mortgage | The rate doesn't change and you have the same monthly payment during the entire time of the mortgage loan |
Points | An amount of money the buyer pays to the lending institution |