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Year 10 F Maths

Financial Maths terminology

Principal The amount of money initially borrowed or invested
Rate The rate of Interest- usually quoted as a percentage, or written as a decimal
Interest The amount of money gained by the investor or lender
Time periods The number of Time periods is listed as n
I=Prn Formula for Simple Interest
Deposit An initial amount of money paid to secure a sale
Balance The Balance owed or the bank Balance of an investment
Loan Money borrowed to purchase an item
Investment Money banked or put aside to save for future
Repayment Amount of money repaid each time period
pa per annum- each year
Compound Interest Interest is added to the principal each time period before calculating the next amount of interest. It increases exponentially
Simple interest Straight line interest. The interest is calculated on the whole amount at the same rate
A=P (1+r)^n Formula for Compound Interest
Created by: askyba
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