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A 4-year-old child is shown a row of seven red checkers. He is asked to place a black checker immediately adjacent to each red one. Upon doing so, the child agrees that there are as many red as black checkers. The experimenter then spreads out the black checkers so that they lie in a line longer than the red checkers. The experimenter asks whether there are more red checkers or more black checkers in order to determine whether the child understands __________.
Stated Interest Rate
The annual interest rate declared on a loan or investment, not accounting for compounding or other effects.
Quoted Interest Rate
The interest rate that a lender states or advertises, not accounting for the compounding of interest within a specific period.
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.
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