Interest
the charge for the privilege of borrowing money, typically expressed as annual percentage rate
What is Interest?
Someone who takes something they must repay
What is a Borrower?
S =P (r) (t)
What is the formula for Simple Interest?
A debt repayment strategy ordering debts by lowest balance first
What is the Debt Snowball?
The initial size of a loan, the amount you must repay
What is Principal?
A credit card is a good example of this
What is Unsecured or Revolving Debt?
FV = P (1 + rt)
What is the formula for the future value of a simple interest investment?
A debt repayment strategy ordering debts by highest interest first
What is the Debt Avalanche?
The interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods
What is Compound Interest?
An installment debt secured by real estate
What is a Mortgage?
FV = PV x (1 + r) ^ t
What is the formula for the future value of a compound interest investment?
Missing from this American Proverb: "Before borrowing money _______, decide which you need most."
What is "from a friend"?
Investing in this will usually result in a lower return than an investment that compounds
What is a Simple Interest Investment?
Typically ranges from 300 to 850
What is a FICO Score?
=FV(rate, number of periods, payment amount, present value, beginning or end of period)
What is the future value formula in Google Sheets?
Finishing this quote: "Don't buy stuff _____"
What is "you cannot afford" or "if you don't have money"
Speaking about this, Albert Einstein said "He who understands it, earns it. He who doesn't, pays it."
What is Compound Interest?
This type of debt has no fixed repayment schedule
What is Revolving?
The future value of $1,000 invested at 10% compound interest for 10 years
What is $2,593.74?
When comparing investment results, the biggest factor in which investment made the most money after compounding
What is starting earlier?