F. Ernest Jerome
| Equivalent payments | Alternative payments that will result in the same future value at a later date.
(See page 226.)
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| Focal date | The date selected for the calculation of equivalent values.
(See page 228.)
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| Future value | A payment's equivalent value at a subsequent date, allowing for the time value of money.
(See page 222.)
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| Interest | The fee or rent that lenders charge for the use of their money.
(See page 211.)
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| Maturity date | The date on which the principal and accrued interest on an investment or loan are due.
(See page 222.)
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| Maturity value | The total of principal plus the interest due on the maturity date of a loan or investment.
(See page 222.)
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| Payment stream | A series of two or more payments required by a single transaction or contract.
(See page 232.)
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| Present value | A payment's equivalent value at a prior date, allowing for the time value of money.
(See page 226.)
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| Prime rate of interest | A chartered bank's lowest lending rate.
(See page 219.)
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| Principal | The original amount borrowed or invested.
(See page 212.)
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| Rate of interest | The percentage of the principal that will be charged for a particular period of time, normally 1 year.
(See page 212.)
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| Simple interest | Interest calculated only on the original principal and paid only at the maturity date.
(See page 212.)
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| Time diagram | A time axis showing the dollar amounts and the dates of payments.
(See page 233.)
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| Time value of money | The property that a given nominal amount of money has different economic values on different dates.
(See page 232.)
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2003 McGraw-Hill Higher Education