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Business Math Ch. 4
Vocabulary
Question | Answer |
---|---|
The difference between payments and credits during a month from the balance at the end of the previous month. | Adjusted Balance Method |
A percent that shows the ratio of finance charges to the amount financed. | Annual Percentage Rate (APR) |
The periodic rate applied to the average daily balance in the account during the billing period. | Average Daily Balance Method |
interest collected in advance. | Bank Discount |
The cash received when money is borrowed on a credit card. | Cash Advance |
The part of a price that is paid at the time of buying on the installment plan. | Down Payment |
Interest based on exact time and a 365-day year. | Exact Interest Method |
The sum of the interest and any other charges on an installment loan or purchase. | Finance Charge |
Money paid to an individual or institution for the privilege of using their money. | Interest |
Interest based on a 360-day year. Known as the banker's interest method. | Ordinary Interest Method |
A daily or monthly rate found by dividing the Annual Percentage Rate (APR) by 365 or 12. | Periodic Rate |
Charges interest on the balance in the account on the last billing date of the previous month. | Previous Balance Method |
The one for whom an agent acts; the face of a note; the amount on which interest is paid. | Principal |
Your written promise that you will repay the money to the lender on a certain date. | Promissory Note |
Interest shown as a percent. | Rate of Interest |
For a note, the length of time for which the money is borrowed. | Time |