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PCS Financial Math
Chapter 8 Vocabulary - Loans
Term | Definition |
---|---|
single-payment loan | a loan that has to be repaid with one payment after a specified period of time |
promissory note | a written promise to pay a certain sum of money on a certain date in the future |
maturity value | the total amount that must be repaid on a loan, including the principal borrowed and the interest owed |
term | the amount of time for which a loan is granted before it has to be repaid |
ordinary interest | interest on a loan calculated by basing the time of the loan on a 360 day year |
exact interest | interest on a loan calculated by basing the tie of the loan on a 365 day year |
installment loan | a loan repaid in equal payments over a specified period of time |
down payment | a portion of the cash price of an item that has to be paid before financing the rest on credit |
amount financed | the portion of the cash price that is owed on an item after making the down payment |
simple interest installation loan | a loan repaid with equal monthly payments |
annual percentage rate (APR) | an index showing the cost of borrowing money on a yearly basis, expressed as a percent |
repayment schedule | a schedule showing the distribution of interest and principal payments on a loan over the life of the loan |
final payment | payment on a simple interest loan that consists of the remaining balance plus the current month's interest |