Business Math Chapter 4 Vocabulary – Flashcards
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Amount Financed
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the amount you are actually borrowing.
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APR
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A percent that shows the ration of finance charges to the amount financed.
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ATM
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A computer system that lets you withdraw or deposit money in your bank account without teller's help.
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Average Daily Balance Method
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the periodic rate applied to the average daily balance in the accoujnt during the billing period.
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Balance
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the amount of money in a account; the difference between the two sides of an account.
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Bank Discount
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interest collected in advance.
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Cash Advance
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The cash received when money is borrowed on a credit card.
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Collateral
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security pledged for the repayment of a loan
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Credit
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An entry recording a sum received, listed on the right-hand side or column of an account. The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.
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Credit Card
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a small plastic card issued by a bank, business, etc., allowing the holder to purchase goods or services on credit.
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Credit Card Statement
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Transactions: money spent/charged/refunded. what you purchased, payment, fees and credits, dates, credit limit
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Discounted Promissory Note
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When banks and other lenders may lend money to businesses and people for short periods of time, such as 30,60 or 90 days. short term loans. Typically borrower sign note and pay interest when loan is made.
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Down Payment
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The part of a price that i paid at the time of buying on the installment plan.
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Exact Interest Method
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Interest based on exact time and a 365 day year
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Finance Charge
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the um of interest and any other charges on an installment loan or purchase.
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Interest
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Money paid to an individual or institution for the privilege of using their money.
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Previous Balance Method
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Charges interest on the balance in the account on the last billing date of the previous month.
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Rule of 78
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the sum of the number 1-12, the number of months in a one year loan is 78.
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Service Charge
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is a deduction made by the bank for handling the checking account
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Statement Closing Date
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the last date on which transaction are posted to the statement,
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Transaction
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A deposit or withdrawal that has to be recorded
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Transaction Fee
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A charge an intermediary, such as a broker-dealer or a bank, assesses for assisting in the sale or purchase of a security.
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True Rate of Interest
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must divide the interest paid (bank Discount) by the amount you actually received (proceeds)
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Installment Plan
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payment plan (typically monthly plan) Borrow Money and pay it back in smaller payments
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Down Payment
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part of purchase price, you pay upfront
