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D076 Module 4 REVIEW A+
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3 components of interest rate, or required rate - opportunity cost, risk, and inflation 3 different names used for interest rate - discount rate, required rate, cost 9f capital compound interest - interest earned on both the principal amount and any interest already earned Inflation - is the rate at which the average price level of goods and services increases Interest rate is also called - required rate of return when it refers to the compensation that an investor or lender will accept for investments such as stocks, bonds, or loans opportunity cost - is the loss of potential gain Risk - is the possibility that the actual return will differ from the expected return simple interest - interest paid on the principal alone
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D076 WGU
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