QL - Simple & Compound Interest and Student Loan Vocab. Flashcard

Front

What is a subsidized loan?

Back

A subsidized loan is a type of loan where the government pays the interest while the borrower is in school.

Front

What is an unsubsidized loan?

Back

An unsubsidized loan is a type of loan where the borrower is responsible for paying the interest while in school.

Front

What does FAFSA stand for?

Back

FAFSA stands for Free Application for Federal Student Aid.

Front

What is the main advantage of federal student loans over private student loans?

Back

Federal student loans offer more flexible repayment terms.

Front

What is compound interest?

Back

Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

Front

How do you calculate the total amount in a savings account with compound interest?

Back

Total Amount = Principal × (1 + Interest Rate) ^ Number of Years.

Front

If you deposit $1,500 at 7% annual compound interest, what will be the total amount after 3 years?

Back

$1,837.56.

Front

What is the formula for calculating simple interest?

Back

Simple Interest = Principal × Rate × Time.

Front

If Ricco deposits $500 at 2.5% for 3 years, how much interest does he earn?

Back

Ricco earns $37.50 in interest.

Front

If Wally deposits $500 at 5.1% for 2 years, how much interest does he earn?

Back

Wally earns $51.00 in interest.