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Definition
| the increases in an amount of money as a result of interest earned |
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Definition
| a series of payments of a fixed amount that occur for a specified number of periods |
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Definition
| represents the cost of money |
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Definition
| the total amount that will be available later. The amount to which current savings will increase based on a certain interest rate and a certain time period (T + interest=future value), also known as compounding |
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Term
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Definition
| amount of savings (the dollar amount initially in the savings account) |
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Term
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Definition
| to find out how quickly prices (or savings) will double, divide 72 by the annual inflation (or interest) rate (example: with an annual inflation rate of 4%, prices will double in 18 years [72/4=18]) (example: if I earn 6% interest, my money will double in 12 years [72/6=12]) |
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Term
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Definition
| the current value for a future amount based on a certain interest rate and a certain time period, also known as discounting. How much to deposit NOW to get a set amount in the future (I must put $___ in the bank now to have $10000 in 5 years at a 2% annual interest rate) |
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