Term

Definition
The manifestation of the time value of money. 


Term

Definition


Term

Definition
Earned when a person or organization saves, invests or lends money & obtains a return of a larger amount. 


Term

Definition
(End amount)  (Original Amount) as a Percent(%) 


Term
Formula for Interest Rate or Rate of Return or Return on Investment 

Definition
[(Interest accrued per time unit)/(Original Amount)] * 100% 


Term
An employee @ Laserkinetics can borrow $10,000 on May 1st & must repay a total of $10,700 exactly 1 yr later. Determine the interest amount and the interest rate paid. 

Definition
($10,700)  ($10,000) = $700
Manipulating the equation...
% = ($700)/($10,000) 


Term
Calculate the amount deposited 1yr ago to have $1000 now @ an interest rate of 5%. Also calculate the amount of interest earned during this time period. 

Definition
$1000 = x + x(0.05) = x(1 +0.05) = 1.05x
x = (1000)/(1.05) = 952.38
I = $1000  952.38 

