Term
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Definition
| Uses the APR tables to determine the finance charge when you repay an installment loan early. |
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Term
2
Actuarial Method for Unearned Interest
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Definition
| u = ( n * P * V) / (100 + V) |
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Term
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Definition
[image]
An account into which, or out of which, a sequence of scheduled payments is made. |
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Term
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Definition
| Interest rate for the variable-rate loan may change every period, as specified in the loan. |
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Term
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Definition
| A balance determined each day of the billing period for which there is a transaction in the account. |
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Term
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Definition
The interest charged by the bank in advance. |
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Term
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Definition
| A year consists of 360 days, and any fractional part of a year is the exact number of days of the loan. |
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Term
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Definition
[image]
Interest that is computed on the principal and any accumulated interest. |
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Term
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Definition
| Bankers sometimes grant loans without security, but they require the signature of one or more other persons who guarantee the loan will be repaid. |
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Term
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Definition
| A type of loan in which the interest is paid at the time the borrower receives the loan. |
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Term
11
Effective Annual Yield or annual percentage yield (APY) |
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Definition
| The simple interest rate that gives the same amount of interest as a compound rate over the same period of time. |
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Term
12
Fixed Installment Loan |
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Definition
| A loan on which you pay a fixed amount of money for a set number of payments. |
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Term
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Definition
| The amount invested as principal is guaranteed and the interest is computed at a fixed rate. |
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Term
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Definition
| A long-term loan in which the property is pledged as a security payment of the difference between the down payment and the sale price. |
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Term
15
Individual Retirement Accounts
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Definition
| Savings accounts that allow individuals to invest up to a certain amount of money each year for the purpose of saving for retirement. |
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Term
16
Installment Payment Formula |
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Definition
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Term
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Definition
| The money the borrower pays to use the lender’s money. |
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Term
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Definition
| The use of money or capital for income or profit. |
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Term
19
Open-Ended Installment Loan |
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Definition
| A loan on which you can make variable payments each month. |
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Term
20
Ordinary Annuity Formula
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Definition
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Term
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Definition
| A ratio of some number to 100. |
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Term
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Definition
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Term
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Definition
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Term
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Definition
| A document (or agreement) that states the terms and conditions of the loan. |
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Term
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Definition
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Term
26
Security
(or collateral)
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Definition
| Anything of value pledged by the borrower that the lender may sell or keep if the borrower does not repay the loan. |
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Term
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Definition
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Interest based on the entire amount of the loan for the total period of the loan. |
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Term
28
Credit
The amount of credit extended |
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Definition
| Principal of the loan and the interest rate that you may obtain depend on the assurance that you can give the lender that you will be able to repay the loan. |
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Term
29
Truth in Lending Act in 1968 |
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Definition
This law requires that the lending institution tell the borrower two things:
The annual percentage rate (APR) is the true rate of interest charged for the loan.
The total finance charge is the total amount of money the borrower must pay for borrowing the money: interest plus any additional fees charged. |
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Term
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Definition
| Neither the principal nor the interest is guaranteed. |
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