|Interest on interest|
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Definition of Interest on interest
Interest on interest
interest earned on reinvestment of each interest payment on money invested.
The accumulated coupon interest earned but not yet paid to the seller of a bond by the
The amount of interest accumulated on a debt security between
The amount of interest owing but not paid.
Swap in which the principal or national amount rises (falls) as interest rates
An option is at-the-money if the strike price of the option is equal to the market price of the
Automatic payment of moneys derived from a benefit.
A statistical compilation formulated by a sovereign nation of all economic transactions
The difference between the demand for and supply of a country's currency on the foreign exchange market.
A statement of a country's transactions with other countries.
Related: Benchmark interest rate.
Also called the base interest rate, it is the minimum interest rate investors will
The requirement that a claim holder voting against a plan of reorganization
The lease payment at which a party to a prospective lease is indifferent between
The prepayment rate of a MBS coupon that will produce the same CFY as that of
Also called the broker loan rate , the interest rate that banks charge brokers to finance
interest that is not immediately expensed, but rather is considered as an asset and is then
interest incurred during the construction period on monies invested in
Cash flow after interest and taxes
Net income plus depreciation.
Clearing House Automated Payments System (CHAPS)
A computerized clearing system for sterling funds
Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value
interest paid on previously earned interest as well as on the principal.
interest paid on principal and on interest earned in previous
a method of determining interest in which interest that was earned in prior periods is added to the original investment so that, in each successive period, interest is earned on both principal and interest
interest earned on interest.
interest earned on an investment at periodic intervals and added to principal and previous interest earned. each time new interest earned is calculated it is on a combined total of principal and previous interest earned. Essentially, interest is paid on top of interest.
Option on an option.
The process of accumulating the time value of money forward in time. For example, interest
When an asset generates earnings that are then reinvested and generate their own earnings.
The number of compounding periods in a year. For example, quarterly
The length of the time period (for example, a quarter in the case of quarterly
the time between each interest computation
The process of accumulating the time value of money forward in time on a
The process of continuously adding interest to a principal plus
A bond's interest payments.
Covered interest arbitrage
A portfolio manager invests dollars in an instrument denominated in a foreign
Current Tax Payment Act of 1943
A federal Act requiring employers to withhold income taxes from employee pay.
Daily Interest Accumulation
Account in which interest is accrued daily and credited to the account at the end of a specified time.
Date of payment
Date dividend checks are mailed.
Delivery versus payment
A transaction in which the buyer's payment for securities is due at the time of
compounding the time value of money for discrete time intervals.
The process of adding interest to a principal plus interest amount
Dividend reinvestment plan (DRP)
Automatic reinvestment of shareholder dividends in more shares of a
earned income is generally an individual's salary or wages from employment. It also includes some taxable benefits. earned income also includes business income if the individual is self-employed. earned income is used as the basis for calculating RRSP maximum contribution limits.
earnings before interest and income tax (EBIT)
A measure of profit that
Earnings before interest and taxes (EBIT)
A financial measure defined as revenues less cost of goods sold
Earnings before interest and taxes (EBIT)
The operating profit before deducting interest and tax.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
The operating profit before deducting interest, tax, depreciation and amortization.
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
An earningsbased measure that, for many, serves as a surrogate for cash flow. Actually consists of working
Effective annual interest rate
An annual measure of the time value of money that fully reflects the effects of
effective annual interest rate
interest rate that is annualized using compound interest.
Effective Interest Rate
The rate of interest actually earned on an investment. It is
Electronic Federal Tax Payment Systems (EFTPS)
An electronic funds transfer system used by businesses to remit taxes to the government.
Equilibrium rate of interest
The interest rate that clears the market. Also called the market-clearing interest
FHA prepayment experience
The percentage of loans in a pool of mortgages outstanding at the origination
Fiat money is paper currency made legal tender by law or fiat. It is not backed by gold or silver and is not necessarily redeemable in coin. This practice has had widespread use for about the last 70 years. If governments produce too much of it, there is a loss of confidence. Even so, governments print it routinely when they need it. The value of fiat money is dependent upon the performance of the economy of the country which issued it. Canada's currency falls into this category.
Fixed Interest Rate
A rate that does not fluctuate with general market conditions.
Floating Interest Rate
A rate that fluctuates with general market condition.
Forward interest rate
interest rate fixed today on a loan to be made at some future date.
fractional interest discount
the combined discounts for lack of control and marketability. g the constant growth rate in cash flows or net income used in the ADF, Gordon model, or present value factor.
Graduated-payment mortgages (GPMs)
A type of stepped-payment loan in which the borrower's payments
interest earned before taxes are deducted.
Guaranteed Interest Annuity (GIA)
interest bearing investment with fixed rate and term.
Guaranteed Interest Certificate (GIC)
interest bearing investment with fixed rate and term.
See money base.
money that moves across country borders in response to interest rate differences and that moves
A put option that has a strike price higher than the underlying futures price, or a call option
In England in the 1700's it was popular to bet on the date of death of certain prominent public figures. Anyone could buy life insurance on another's life, even without their consent. Unfortunately, some died before it was their time, dispatched prematurely in order that the life insurance proceeds could be collected. In 1774, English Parliament passed a law which restricted the right to be a beneficiary on a life insurance contract to those who would suffer an economic loss when the life insured died. The law also provided that a person has an unlimited insurable interest in his own life. It is still a legal stipulation that an insurance contract is not valid unless insurable interest exists at the time the policy is issued. Life Insurance companies will not, however, issue unlimited amounts of coverage to an individual. The amount of life insurance which will be approved has to approximate the loss caused by the death of the individual and must not result in a windfall for the beneficiary.
Interac® Direct Payment
Instead of paying with cash or a credit card, Interac Direct payment allows you to pay for your purchase with a debit card, such as your bank card. The amount of the purchase is electronically debited, or withdrawn, from your bank account (see debit card).
The price paid for borrowing money. It is expressed as a percentage rate over a period of time and
The cost of money, received on investments or paid on borrowings.
The cost of funds loaned to an entity. It can also refer to the equity ownership
A charge for the use of money supplied by a lender.
The cost of a loan or the compensation paid for the use of money. For example, you are paid interest for deposits you make into a savings account, and you pay interest for money that you borrow from a low-cost borrowing account.
Interest coverage ratio
The ratio of the earnings before interest and taxes to the annual interest expense. This
Interest coverage test
A debt limitation that prohibits the issuance of additional long-term debt if the issuer's
Interest equalization tax
Tax on foreign investment by residents of the U.S. which was abolished in 1974.
Numbers found in compound interest and annuity tables. Usually called the FVIF or PVIF.
Income that a company receives in the form of interest, usually as the result of keeping money in interest-bearing accounts at financial institutions and the lending of money to other companies.
Interest-only strip (IO)
A security based solely on the interest payments form a pool of mortgages, Treasury
One of several investment accounts in which your premiums may be invested within your life insurance policy.
The amount of interest that is owed but has not been paid at the end of a period.
Contractual debt payments based on the coupon rate of interest and the principal amount.
Cost of using money, expressed as a rate per period of time, usually one year.
Rate charged or paid for the use of money, normally expressed as a percentage
Interest rate agreement
An agreement whereby one party, for an upfront premium, agrees to compensate the
Interest rate cap
Also called an interest rate ceiling, an interest rate agreement in which payments are made
Interest rate ceiling
Related: interest rate cap.
Interest Rate Differential
The interest rate on our financial assets minus the interest rate on a foreign country's financial assets.
Interest rate floor
An interest rate agreement in which payments are made when the reference rate falls
Interest Rate, Nominal
payment for the use of borrowed funds, measured as a percentage per year of these funds.
Interest rate on debt
The firm's cost of debt capital.
interest rate parity
Theory that forward premium equals interest rate differential.
Interest Rate Parity
Theory that real interest rates are approximately the same across countries except for a risk premium.
Interest rate parity theorem
interest rate differential between two countries is equal to the difference
Interest Rate, Real
Nominal interest rate less expected inflation.
Interest rate risk
The risk that a security's value changes due to a change in interest rates. For example, a
Interest Rate Risk
Possibility that interest rates will rise during the term of a loan thereby increasing the annual cost of borrowing.
Interest rate swap
A binding agreement between counterparties to exchange periodic interest payments on
A firm's deduction of the interest payments on its debt from its earnings before it calculates
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