Chapter 8: Glossary of Terms
Glossary of Terms
Accrued interest
Commercial paper
Compound interest
Current balance
Discount rate
Equivalent payments
Face value of a T-bill
Fixed interest rate
Future value
Guaranteed investment certificate (GIC)
Interest amount
Interest rate
Maturity date
Maturity value
Present value
Principal
Repayment schedule
Savings account
Simple interest
Time period
Treasury bills
Variable interest rate
Yield
Any interest amount that has been calculated but not yet placed (charged or earned) into an account.
A short-term financial instrument with maturity no longer than one year that is issued by large corporations.
A system for calculating interest that primarily applies to long-term financial transactions with a time frame of one year or more; interest is periodically converted to principal throughout a transaction, with the result that the interest itself also accumulates interest.
The balance in an account plus any accrued interest.
An interest rate used to remove interest from a future value.
Two payments that have the same value on the same day factoring in a fair interest rate.
The maturity value of a T-bill, which is payable at the end of the term. It includes both the principal and interest together.
An interest rate that is unchanged for the duration of the transaction.
The amount of principal with interest at a future point of time for a financial transaction. If this future point is the same as the end date of the financial transaction, it is also called the maturity value.
An investment that offers a guaranteed rate of interest over a fixed period of time.
The dollar amount of interest that is paid or earned.
The rate of interest that is charged or earned during a specified time period.
The date upon which a transaction, such as a promissory note, comes to an end and needs to be repaid.
The amount of money at the end of a transaction, which includes both the interest and the principal together.
The amount of money at the beginning of a time period in a transaction. If this is in fact the amount at the start of the financial transaction, it is also called the principal. Or it can simply be the amount at some time earlier before the future value was known. In any case, the amount excludes the interest.
The original amount of money that is borrowed or invested in a financial transaction.
A table that details the financial transactions in an account, including the balance, interest amounts, and payments.
A deposit account that bears interest and has no stated maturity date.
A system for calculating interest that primarily applies to short-term financial transactions with a time frame of less than one year.
The length of the financial transaction for which interest is charged or earned. It may also be called the term.
Short-term financial instruments with maturities no longer than one year that are issued by both federal and provincial governments.
An interest rate that is open to fluctuations over the duration of a transaction.
The percentage increase between the sale price and redemption price on an investment such as a T-bill or commercial paper.
