Vocab Interest & Banking

Fill in the blank: The original amount of money invested, deposited, or borrowed before interest is called _________.

• Principal

• Dividend

• Revenue

• Equity

Fill in the blank: The cost of borrowing money or the reward for saving/investing money, usually expressed as a percentage, is called _________.

• Interest

• Dividend

• Principal

• Depreciation

Fill in the blank: Interest calculated only on the original principal amount is called _________.

• Simple Interest

• Compound Interest

• Annual Percentage Rate

• Reducing Balance Interest

Fill in the blank: Interest calculated on both the original principal and any interest already earned is called _________.

• Compound Interest

• Simple Interest

• Fixed Interest

• Nominal Interest

Fill in the blank: The yearly cost of borrowing money, expressed as a percentage of the loan balance, is called _________.

• Annual Percentage Rate (APR)

• Principal Amount

• Loan Term

• Credit Limit

Fill in the blank: The yearly return on savings or investment, including the effects of compounding, is called _________.

• Annual Percentage Yield (APY)

• Simple Interest Rate

• Nominal Rate

• Dividend Yield

Fill in the blank: A shortcut formula to estimate how long it will take for an investment to double, by dividing 72 by the interest rate, is called the _________.

• Rule of 72

• Law of 70

• Power of 2

• Doubling Principle

Fill in the blank: The idea that a dollar today is worth more than a dollar in the future because it can earn interest is called _________.

• Time Value of Money

• Compound Interest

• Inflation Rate

• Opportunity Cost

Fill in the blank: The general rise in prices of goods and services, which reduces the purchasing power of money over time, is called _________.

• Inflation

• Deflation

• Stagflation

• Depreciation

Fill in the blank: The length of time over which a loan is scheduled to be repaid is called _________.

• Loan Term

• Interest Rate

• Down Payment

• Credit Score