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part 2 Banking and Credit Test 1/2a

Terms in this set (12)

Compound interest
Interest calculated on both the principal and the accrued interest. Interest added on top of interest.
Principal
The total amount of money outstanding on a loan.The original amount of the loan
Simple interest
Interest earned only on the original amount or principal.
Time value of money
Refers to the fact that money received today is worth more than money received next year or the year after.
Variable interest
an interest rate that moves up and down
Fixed Interest
an interrest rate that remains constant over the entire term of the loan
Liquidity
The ease with which an asset can be converted into cash
Face value
The principal amount of a bond that is repaid at the end of the term
Finance Charge
A fee charged for the use of credit
checks
Legal documents that function like cash
Credit union
________ are not-for-profit savings and lending financial institutions, owned by its members
taxable
Savings account interest is __________
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