The Dollar Amount Shown on an Interest-Bearing Note Is Called

question 69

Short Answer

The dollar amount shown on an interest-bearing note is called the principal, or--------- value.

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Definitions:

Interest Payment

The payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rate.

Compounded

The process of generating earnings from previous earnings, calculated by applying the earnings rate not only to the principal but also to the accumulated earnings over past periods.

Compounds Semi-Annually

Interest on an investment or loan is calculated and added to the principal balance twice a year.

Compounds Monthly

Refers to the process of applying interest to an amount where the interest earned itself earns interest, recalculated on a monthly basis.