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Saving is equal to
Effective Interest Rate Method
The method of amortizing discounts and premiums that provides for a constant rate of interest on the carrying amount of the bonds at the beginning of each period; often called simply the “interest method.”
Constant Dollar
A term used in economics to describe a monetary value that has been adjusted for inflation, thereby facilitating comparison of purchasing power over different periods.
Interest Expense
The cost incurred by an entity for borrowed funds, often reported on the income statement as a non-operating expense.
Unamortized Premium
The portion of the bond premium that has not yet been amortized (expensed) over the life of the bond.
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