The process of accumulating interest on an investment over time to earn more interest.

Interest earned only on the original principal amount invested.

The rate used to calculate the present value of future cash flows.

Calculating the present value of a future cash flow to determine its value today.

The amount an investment is worth after one or more periods. (Amount you will have)

The current value of future cash flows discounted at the appropriate discount rate. (Amount you have rn)

The amount you earn from investing your money

Interest earned on the reinvestment of previous interest payments.

A simple way to determine how long an investment will take to double in value given a fixed annual rate of interest.

A loan that requires the borrower to make a fixed scheduled, periodic (monthly) payments where part of the payment is applied to paying the interest and paying part of the principal of the loan.

Type of loan repayment plan calls for the borrower to pay just the interest each period and to repay the entire loan principal at some point in the future

The simplest form of loan where the borrower receives money today and repays a single lump sum at some time in the future.

The interest rate charged per period multiplied by the number of periods per year.

The interest rate expressed as if it were compounded once per year.

An annuity in which the cash flows continue forever.

An annuity for which the cash flows occur at the beginning of the period.

Each payments occurs at the end of each period

A cash flow that is not only expected to be received forever, but it also grows at a constant rate of growth forever.

The borrower makes a single, much larger payment to pay off the loan principal at the end of the loan