3.7 Key Terms
definition
When the interest of each period is added to the principal in computing the interest for the next period.
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 original amount of money that is borrowed or invested in a financial transaction. Also called as the present value.
The length of the financial transaction for which interest is charged or earned. It may also called the term.
