Chapter 5.2 Vocab.

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Presentation transcript:

Chapter 5.2 Vocab

Compounded Interest Interest earned not only on the principal but also on the interest already earned.

Principal The original amount of money deposited or invested.

Rule of 72 The length of time, in years, it takes an amount of money saved to double when it receives compound interest. The length of time can be found by dividing the interest rate (expressed as a whole number) into 72.

Simple Interest Interest calculated periodically on the loan principal or investment principal only, not on previously earned interest.