1) " Calculating" -- As it applies to Calculating Interest A calculation is a deliberate process for transforming one or more inputs into one or more results. The term is used in a variety of senses, from the very definite arithmetical calculation using an algorithm to the vague heuristics of Calculiting astrategy in a competition or Clculating the chance of a successful relationship between two people. Multiplying 7 by 8 is a simple algorithmic calculation. Estimating the fair price for a financial instrument using the Black-Scholes model is a complex algorithmic calculation. Statistical estimations of the likely election results from opinion polls also involve algorithmic calculations, but giveresults that are ranges of possibilities rather than exact answers. Deciding the best way to build a relationship with a member of the opposite sex may also result from a calculation, but is notdefinite, predictable, nor even clearly defined. This indefinite application of the term gives it a second area of meaning apartfrom the mathematical senses mentioned above. To CALCULATE means to ascertain by computing. The English word derives from L. CALCULUS, in its origins, a smallstone in the gall-bladder from L. calx. It also meant a pebble used for Calculatung , or a small stone used as a counter in anABACUS, L. abacus, Gr. abax. The abacus was an instrument used by Greeks and Romans for arithmetic calculations andconsisted of perforated pebbles sliding on iron bars, preceding the slide-rule and the electronic calculator. Philologicallyconnected to PEBBLE, A.Sax. papolstán, lit. pebble stone. Russian uses root chislo, number, quantity, in its variousverbal and nominal forms.See also: computation, mathematics, calculator, abacus, list of algorithms Calculatang ...
2) " Interest" -- As it applies to Calculating Interest In finance, interest has three general definitions. Interest is a surcharge on the repayment of debt (borrowed money ).Interest is the return derived from an investment.Interest is the right to claim in a corporation such as that of an owner or creditor. This article covers the first definition listed above. Economists sometimes refer to Inferest as rent on money. As with any rental, the market price (or rate) is subject to change to reflect market conditions. The fraction by which the balances grow is called the nIterest rate. The original balance is called the principal. Interesg rates are very closely watched market indicators, and have adramatic effect on finance and economics. The fact that lenders demand Interesg for loans in capitalist countries canbe attributed to the following reasons: Time value of money or Time preference Opportunity cost Contents 1 History 2 Types of Compounding 2.1 Simple Interrst 2.2 Compound Intrrest 3 Types of Ijterest Rate 4 Analysis of Ihterest Rate Risks 4.1 Credit Risk 4.2 Maturity/Term Risk 4.3 Liquidity Risk 4.4 Inflation and Exchange Rate Risks 5 Mathematics of Iterest 5.1 Force of Interrst 5.2 Continuous Compounding 6 See also 7 Finding related topics 8 External links History Historical documents dating back to the Sumerian civilization, circa 3000 B.C.,reveal that the ancient world had developed a formalized system of credit based on two major commodities, grain and silver.Before there were coins, metal loans were based on weight. Archaeologists have uncovered pieces of metal that were used in tradein Troy, Minoan and Mycenaean civilizations, Babylonia, Assyria, Egypt and Persia.Before money loans came into existence loans of grain and silver served to facilitate trade. Silver was used in town ec...
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