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Percent

Just a fancy way of saying "divided by 100." Percentage = (Part/Whole) * 100

Absolute Change

The actual increase or decrease from a reference value to a new value. Absolute Change = New Value - Reference Value

Relative Change

A fraction that describes the size of the absolute change in comparison to the reference value. Relative Change = Absolute Change/Reference Value

Absolute Difference

The actual difference between the compared value and the reference value. Absolute difference = compared value - reference value

Relative Difference

The size of the absolute difference as a fraction of the reference value. Relative difference = Absolute difference/reference value

The Relation of "Of" to "More Than"

Using more than states an increase in the percentage. Using of states a ration of the new percentage to the original.

Interest

The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.

Principle

The money being borrowed.

Simple Interest

Interest that is charged only once over the life of the loan. ***I = PRT

APY

Annual percentage yield. Applied to any investment but not typically a mortgage, to compare investments with different or no compounding schemes.

Compound Interest

Interest paid on the principal plus any previously accrued interest. A = P(1+r)^t

Installment Loan

The loan is paid back in small equal periodic payments.

Periodic Rate

The interest rate described in relation to a specific amount of time. For example, the Monthly Periodic Rate is the cost of credit per month; the Daily Periodic Rate is the cost of credit per day

Revolving Credit

a credit agreement that allows consumers to pay all or part of the outstanding balance on a loan or credit card. As credit is paid off, it becomes available again to use for another purchase or cash advance

Grace Period

length of time you have before you start accumulating interest

Down Payment

upfront payment of a portion of a purchase price, thereby reducing the balance.

Mortgage

a long-term loan extended to someone who buys property

Fixed Rate Mortgage

A mortgage in which the interest rate does not change during the entire term of the loan.

Adjustable Rate Mortgage

Has an interest rate that increases or decreases during the life of the loan.

Balloon Mortgage

a mortgage in which the entire remaining balance of the loan is due in one single payment

Capital Gains

money that is made ( a profit) by selling an asset like a home or stocks

Dividend

The part of the earnings of a corporation that is distributed to its shareholders

Gross Income

the total amount of income from wages before any payroll deductions

Adjusted Gross Income

Is your gross income after certain reductions have been made

Exemption

a deduction allowed to a taxpayer because of his status (having certain dependents or being blind or being over 65 etc.)

Deduction

a reduction in the gross amount on which a tax is calculated

Taxable Income

income on which tax must be paid; total income minus exemptions and deductions

Total Tax

the tax computation based on tax table or rate computation minus any tax credits

Tax Refund

A check returning the taxpayers money to the taxpayer after tax retuns are filed and the over paid tax is determined.

Filing Status

Single or Married.

Standard Deduction

A stated amount that you may subtract from adjusted gross income instead of itemizing your deductions

Itemized Deduction

a specific expense, such as mortgage interest, that you deduct from your adjusted gross income.

Progressive Income Tax

a tax that takes a larger percentage of higher incomes than lower incomes

Marginal Tax Rates

Change in taxes paid divided by changes in taxable income

FICA

Federal Insurance Contributions Act

Short Term Capital Gains

holding period of 12 months or less, taxed as ordinary income

Long Term Capital Gains

holding period of more than 12 months, taxed as capital gains

Tax-Deferred Savings Plans

Money that you put into saving plans that is not taxed.

Continuous Compounding

A = pe^rt