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Chapter 5 Flash Card
Term | Definition |
---|---|
Savings Account | specific bank account the earns interest, you must make a deposit |
deposit | currency that you put into an account |
withdrawl | taking money out of your account |
account statement | shows the status of your account |
interest | amount of money paid for the use of a lender's money |
simple interest | amount paid on original principle |
principal | the amount of money earning interest |
annual interest rate | the percent of the principal earned as interest in one year |
compound interest | earns money not only from original principal, but also on the interest earned during previous interest periods |
compound interest table | shows the amount of 1.00 for many interest rates and periods |
daily compounding | when interest is added to your account on a daily basis |
annuity | when someone deposits and equal amount at equal periods |
ordinary annuity | occurs when equal deposits are made at the end of each interest period |
annuity due | occurs when you make regular deposits at the beginning of the interest period |