Simple Interest
What is simple interest formula
PRT/100
What is compound interest?
Interest calculated on the initial principal and also on the accumulated interest from previous periods
What is an annuity?
A series of equal payments made at regular intervals.
What is depreciation?
The decrease in value of an asset over time.
What is a recurrence relation?
A mathematical sequence where each term is defined by one or more preceding terms.
The total amount repaid on a simple interest loan, including the principal and the interest.
A=P+I?
What is compounding period or frequency?
The term for the number of times interest is calculated and added to the principal within a year (e.g., quarterly, monthly).
What is loan repayment calculation or amortization?
The financial calculation that determines the regular payment required to repay a loan over a set period.
What is the Flat rate depreciation method?
The depreciation method where an asset loses the same amount of value each year.
What is the initial condition or first term?
The starting value or term in a recurrence relation, often denoted as V0 or A0.
The annual interest rate if a $5,000 investment earns $750 in simple interest over 3 years
What is 5%?
The future value of $2,000 invested for 5 years at 6% per annum, compounded annually.
approximately $2,676.45?
What is the outstanding balance or reducible balance?
The amount remaining to be paid on a loan at a specific point in time.
The scrap value of a car purchased for $30,000 that depreciates by $4,000 per year for 5 years using the straight-line method.
$10,000
The first three terms of the sequence defined by V0=10 and Vn+1=Vn+5.
10, 15, 20?
The principal amount invested if it earns $120 in simple interest over 6 months at an annual rate of 4%.
What is $6,000?
The interest rate per period if an annual rate of 12% is compounded monthly.
1%
The number of payments required to repay a loan of $150,000 with monthly repayments of $800 at an interest rate of 6% per annum, compounded monthly.
257
What is the reducing balance method or declining balance method?
The depreciation method where the value of an asset decreases by a fixed percentage of its current value each year.
The type of depreciation modeled by the recurrence relation V0=P,Vn+1=Vn−D
Flat rate depreciation
The number of years it takes for an investment of $10,000 to double in value at a simple interest rate of 5% per annum.
20 years
The effective annual rate for an advertised rate of 8% per annum compounded quarterly.
8.24%
The maximum amount you can borrow for a home loan if you can afford to pay $2,000 per month for 30 years at an interest rate of 4.8% per annum, compounded monthly.
$467,772.48
The percentage rate of depreciation if an asset valued at $15,000 reduces to $9,600 in 2 years using the reducing balance method.
approximately 20%
The value of V3 for the recurrence relation V0=100,Vn+1=0.8Vn+10.
81.2