SIMPLE AND COMPOUND INTEREST

Question 1

the amount paid for the use of money. For the debtor, it is the payment for the use of the borrowed money. While for the creditor, it is the income from his investment

Answer 1

Interest

Question 2

person (or institution) who invests the money or makes the funds available

Answer 2

Lender or creditor

Question 3

person (or institution) who owes the money or avails of the funds from the leader

Answer 3

Borrower or Debtor

Question 4

Date on which money is received by the borrower

Answer 4

Origin or Loan date

Question 5

date on which the money borrowed or loan is to be completely repaid

Answer 5

Repayment date or maturity date

Question 6

amount of time in years the money is borrowed or invested; length of time between the maturity and maturity dates.

Answer 6

Time or Term

Question 7

amount of money borrowed or invested on the origin date

Answer 7

Principal

Question 8

usually in percent, charged by the lender, or rate of increase of the investment

Answer 8

Rate

Question 9

interest that is computed on the principal and then added to it

Answer 9

Simple Interest

Question 10

interest that is computed on the principal and also on the accumulated past interests

Answer 10

Compound interest

Question 11

amount after t years; that the lender receives from the borrower on the maturity date

Answer 11

Maturity value or Future Value

Question 12

Is generally defined as the interest on a loan or principal that is based on the original amount of the loan and is computed once for the full term of the loan.

Answer 12

Simple Interest

Question 13

refers to the interest of the original amount or principal which is based not only on the principal but also on the previous accumulated interest. This means that aside from the principal, the interest earns interest as well.

Answer 13

Compound interest