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Year 10 F Maths
Financial Maths terminology
Term | Definition |
---|---|
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 |