Glossary Terms:

Calculating Simple Interest

Glossary terms from:
http://www.econedlink.org/e1008


Bank

A financial institution that provides various products and services to its customers, including checking and savings accounts, loans and currency exchange.

Borrow

To receive and use something belonging to somebody else, with the intention of returning or repaying it--often with interest in the case of borrowed money.

Check

A written order to a financial institution directing the financial institution to pay a stated amount of money, as instructed, from the customer's account.

Credit

The opportunity to borrow money or to receive goods or services in return for a promise to pay later.

Interest

Money paid regularly, at a particular rate, for the use of borrowed money.

Interest Rate

The price paid for using someone else's money, expressed as a percentage of the amount borrowed.

Money

Anything that is generally accepted as final payment for goods and services; serves as a medium of exchange, a store of value and a standard of value. Characteristics of money are portability, stability in value, uniformity, durability and acceptance.

Mortgage

A special type of loan for the purchase of a house or other real estate.

Principal

An original amount of money invested or lent.

Resources

The basic kinds of resources used to produce goods and services: land or natural resources, human resources (including labor and entrepreneurship), and capital.

Simple Interest

Interest paid on the initial investment (the principal) only. Calculated by multiplying the investment principal times the annual rate of return times the number of years involved.