1.4 Terminology and Glossary of the Symbols

Terminology

• Dated value or equivalent value: The value of a sum of money at a specific time relative to its due date, including the amount of interest
• Focal date: A reference time chosen to compare the dated value of one or more amounts
• Future value (accumulated or maturity value): the value obtained when the amount of interest is added to the original principal
• Interest: rent paid on the money borrowed or lent
• Nominal rate: the yearly or annual rate of interest charged on the principal of a loan
• p.a.: means per annum or per year.
• Present value (principal or discounted value): The amount borrowed or invested at the beginning of a (loan or investment) period
• Term: refers to either an investment term or loan term, which is the time period an amount is lent or borrowed.

Glossary of Symbols

• [asciimath]I[/asciimath]: Interest Amount ($)
• [asciimath]r[/asciimath]: Interest Rate per period (%)
• [asciimath]t[/asciimath]: Time period the money is borrowed/lent
• [asciimath]P[/asciimath]: Principal (Present Value) ($)
• [asciimath]S[/asciimath]: Future (maturity) value ($)