Key Terms: Chapter 10- Simple Interest

Question	Answer
Adjusted balance	The balance after partial payment less interest is subtracted from the principal.
Banker's rule	Time is exact days/360 in calculating simple interest.
Exact interest	Calculating simple interest using 365 days per year in time.
Interest	Principal × Rate × Time
Maturity value	Principal plus interest (if interest is charged). Represents amount due on the due date.
Ordinary interest	Calculating simple interest using 360 days per year in time.
Principal	Amount of money that is originally borrowed, loaned, or deposited.
Simple interest	Interest is only calculated on the principal. In I = P × R × T, the interest plus original principal equals the maturity value of an interest-bearing note.
Simple interest formula	I = P × R × T
Time	Expressed as years or fractional years, used to calculate simple interest.
U.S. rule	Method that allows the borrower to receive proper interest credits when paying off a loan in more than one payment before the maturity date.

Resource summary

	Created by JOHNA THARP over 1 year ago