Interest Rate
The percentage of interest you either make or pay on a principal
Compound interest
Interest that is generated, not only from the money you put into an account, but also on the interest you make on that money.
The Rule of 72
A method for estimating how long it will take compound interest to cause a principal to double by dividing the interest rate by 72.
Principal
The sum of money you put into an account or the amount of money (minus interest) you owe on a debt.
Interest
The fee someone pays to be able to borrow money.
Budget
A plan of how you will spend the money that you make or receive.
Savings vehicles
Accounts designed to let you set aside money that is separate from your checking account.
Savings accounts
A type of savings vehicle in which you earn interest on the principal, usually without minimum balance requirements but lower interest rates.
Savings plan
A way to save money for the long-term, which for most people means retirement.
Expenses
Anything you spend money on.
Income
The government defines this as any form of money, property, or services that you receive.
Money Market Savings Account
A type of savings vehicle that usually requires high minimum balances but offers higher interest rates.
Certificate of Deposit
A type of savings vehicle in which you put your money away for a certain amount of time, called a term, to allow your principal to earn interest.
Interest Rate
The percentage of interest you either make or pay on a principal
Compound interest
Interest that is generated, not only from the money you put into an account, but also on the interest you make on that money.
The Rule of 72
A method for estimating how long it will take compound interest to cause a principal to double by dividing the interest rate by 72.
Principal
The sum of money you put into an account or the amount of money (minus interest) you owe on a debt.
Interest
The fee someone pays to be able to borrow money.
Budget
A plan of how you will spend the money that you make or receive.
Savings vehicles
Accounts designed to let you set aside money that is separate from your checking account.
Savings accounts
A type of savings vehicle in which you earn interest on the principal, usually without minimum balance requirements but lower interest rates.
Savings plan
A way to save money for the long-term, which for most people means retirement.
Expenses
Anything you spend money on.
Income
The government defines this as any form of money, property, or services that you receive.
Money Market Savings Account
A type of savings vehicle that usually requires high minimum balances but offers higher interest rates.
Certificate of Deposit
A type of savings vehicle in which you put your money away for a certain amount of time, called a term, to allow your principal to earn interest.