Simple Interest and Related Terms

Front

What is Simple Interest (Iѕ)?

Back

Interest that is computed on the principal and remains constant.

Front

Who is a Lender or Creditor?

Back

A person (or institution) who invests the money or makes the funds available.

Front

Who is a Borrower or Debtor?

Back

A person (or institution) who owes the money or avails of the funds from the lender.

Front

What is the Origin or Loan Date?

Back

The date on which money is received by the borrower.

Front

What is the Repayment Date or Maturity Date?

Back

The date on which the money borrowed or loan is to be completely repaid.

Front

What is Time or Term (t)?

Back

The amount of time in years the money is borrowed or invested; length of time between the origin and maturity dates.

Front

What is Principal (P)?

Back

The amount of money borrowed or invested on the origin date.

Front

What is Rate (r)?

Back

The annual rate, usually in percent, charged by the lender, or rate of increase of the investment.

Front

What is Interest (I)?

Back

The amount paid or earned for the use of money.

Front

What is Maturity Value or Future Value (F)?

Back

The amount after t years that the lender receives from the borrower on the maturity date.