2.7 Key Terms
definition
An interest rate used to remove interest from a future value.
The amount of interest that is paid or earned.
The rate of interest that is charged or earned during a specified time period.
The amount of money at the beginning of a time period in a transaction.
The original amount of money that is borrowed or invested in a financial transaction. Also called as the present value.
A system for calculating interest that primarily applies to, in general, short-term financial transactions with a time frame of less than one year.
The length of the financial transaction for which interest is charged or earned. It may also called the term.
