Financial Terms you must Know

Everyone should have a little knowledge of the finances. They would have to know that in the future and that would be also beneficial for them. To know more about the business world, you should get deeper into the finances. These terms would add up a huge benefit to you in understanding that business course. So here are a few terms that would make understanding of the finance, a little bit easier for you:

• Amortization

Amortization is the process of paying the debt in the periods of installments.

• Annuity

It is a product that is made to increase an individual’s funds. After the funds have been increases, the annuitization is applied and then the person has to pay the amount that has been fixed over the specific period of time. It is a great way to save the cash so that it could be used in the later years like the retirement years.

• APR

This is the yearly price of the loan. It is calculated including all the interest and fees. The abbreviation of the APR is the Annual Percentage Rate.

• Annual Percent Yield:

This is known as the Annual Percent Yield. It is the return of the investment that has been done for one year. The interest rate is not normal is but contains more rate which is further multiplied by the period it was taken for.

• Asset:

The asset has something that has an economic value. It can be held by the company or by the individual. An asset is basically seen as a resource that can add the benefit to the company or an individual.

• Bankruptcy:

It is a process in which the assets of the loan taker are liquidated in order to pay the debts of the debtor. It is like a situation in which the person is left with no assets.

• Capital gain

The capital gain is the process by which the selling price of an article exceeds its purchasing price. In short is the profit over an article that is made by selling it.

• Cash Flow:

Cash flow is the flow of the cash in term of the cash payments done over the cash receipts. It is something that defines the financial health of the company. The cash flow is calculated over a period of time like of a month or year.

• Credit Report:

The credit report is the credit history of a particular individual. It shows the information from the past like the recent inquiries, late payments, loans, bankruptcies, etc. The individual can get only one free report from the 3 each financial year.

• Debt:

Debt is the amount that has been borrowed by someone or an industry. In simple words, it is the amount that you have to pay later to the person or company from which you have borrowed the amount.

• Delinquency:

It is the stage when the borrower fails to pay the debt to the person or the company who has given the debt over a period of time.