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15 terms

Financial Lit. Vocab

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Interest
a fixed charge for borrowing money; usually a percentage of the amount borrowed; "how much interest do you pay on your mortgage?"
Simple interest
interest paid on the principal alone
Compound interest
interest calculated on both the principal and the accrued interest
Credit rating
an estimate, based on previous dealings, of a person's or an organization's ability to fulfill their financial commitments
Financial opportunity
An opportunity to make money
Rate of return
The return on an investor's capital. Also called Yield. Expressed in a percentage
Investment
t money that is invested with an expectation of profit
Revenue
The total amount of money made.
Net income
Also called profit. Calculated as the Revenue - Expenses
Budget
A plan of incoming and outgoing monies. Expense and Income.
Expenses
an expense is an outflow of money to another person or group to pay for an item or service, or for a category of costs.
Net Worth
The difference between your total assets and total liabilities
Income Statement
a financial document that shows how much money (revenues) came in and how much money (expenses) was paid out
Principal
The money originally invested or loaned, on which basis interest and returns are calculated
APR
Annual Percentage rate