2.3 Cengage

Front

What is the percentage rate that is paid by a bank on money that is in some accounts?

Back

Interest Rate

Front

What is the term for the interest rate paid per year or charged per year?

Back

Annual Percentage Rate (APR)

Front

What type of account pays a higher interest rate than other types of accounts, usually requiring a higher initial deposit and a higher minimum balance?

Back

Money Market Account

Front

What is the term for the interest calculated only on the principal amount, not on the interest accrued?

Back

Simple Interest

Front

What is the term for the interest calculated on the initial principal and also on the accumulated interest from previous periods?

Back

Compound Interest

Front

What is the formula for calculating Simple Interest?

Back

Simple Interest = Principal x Rate x Time

Front

What is the formula for calculating Compound Interest?

Back

Compound Interest = Principal x (1 + Rate)^Time - Principal

Front

What is the term for the total amount of money that will be paid back to the lender at the end of a loan period?

Back

Total Repayment

Front

What is the term for the amount of money borrowed or invested, excluding interest?

Back

Principal

Front

What is the term for a financial institution that accepts deposits from the public and creates credit?

Back

Bank