40625379
Description
Flashcards by Edilyadiel Gonzalez, updated 20 days ago
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Created by Edilyadiel Gonzalez
20 days ago
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| Question | Answer |
| Promissory Note | Written promise to pay a sum on a future date. |
| Face Value (Principal) | Principal amount borrowed. |
| Term | Time length of the loan. |
| Maturity Date | Date principal + interest are due. |
| Interest-Bearing Note | States an interest rate. |
| Non-Interest-Bearing Note | No interest; repay only face value. |
| Simple Discount Note | Interest deducted in advance. |
| Bank Discount | Interest deducted by bank. Formula: FV × Rate × Time. |
| Proceeds | Amount received after discount. Formula: MV – Bank Discount. |
| Maturity Value | Total due at end of loan. |
| Effective Rate | True cost of borrowing; higher than stated rate. |
| Treasury Bill (T-Bill) | Short-term government debt sold at discount. |
| Discounting Process | Selling a note to bank before maturity. |
| Compound Interest | Interest on principal + past interest. |
| Future Value (FV) | Final amount at end of periods |
| Present Value (PV | Value today of future money. |
| Compounding | Periodic calculation of interest. |
| Nominal Rate | Stated interest rate. |
| APY (Effective Rate) | Real yearly rate with compounding |
| Number of Periods (N) | Years × compounding per year |
| Rate per Period (R | Annual rate ÷ compounding times. |
| Compound Amount | FV from multiplying principal × table factor. |
| Table Lookup | Using tables to find FV or PV. |
| Truth in Savings Law | Requires banks to show APY. |
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