Examlex
Please define the following key terms. Show Who? What? Where? When? Why Important?
-David
Compound Interest
Interest determined on the original amount of a deposit or loan, incorporating all the earned interest from past periods as well.
Compounded Semiannually
A method of calculating interest where the interest is added to the principal twice a year, leading to interest earned on interest.
Compounded Annually
This refers to the process of calculating interest on an investment or loan on a yearly basis, where interest from one year is added to the principal for calculation of interest in the next year.
Present Value
The current value of a future sum of money or stream of cash flows, given a specified rate of return.
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