If you want to understand much about the business world, you need to know the terminologies used in the concept. Therefore, you need to find time to go through the common financial terms. In this article, we will take you through some of the common terms used in finance an also show you how to use them. All you need to do is to pay attention to the contents of this post.One of the terms you need to know about is the compound interest which refers to the amount of money you have deposited or borrowed. Suppose you have invested money, you will get compound interest on the amount you have deposited, including any interests that have accumulated over time. Read more about Financial Terms from here and check it out!
However, compound interest works differently when borrowing since it is charged on the original amount you were loaned, and the interest charges that are added to your outstanding balance for a certain duration.Furthermore, you need to know about FISCO score which is a short form for Fair Isaac Corp. This is the company that came up with the concept of determining credit score. When calculating a credit score, there are several things you need to keep in mind, these include the length of your credit history, your payment history as well as the total amount owed. It is worth noting that the score range from three hundred to eight hundred and fifty. The higher the score, the better the terms one will get on their next loan. This implies that when your score is low, you may have a hard time securing a loan at a favorable interest rate.In addition to understanding Fisco score, another financial term you need to be familiar with is net worth. Your net worth refers to the difference between your assets and liabilities. To be precise, assets refer to what you own whereas liabilities are what you owe. Click here to learn these financial terms
. If you want to determine your net worth, you will have to add up all of your investments without forgetting the current market value of your home and car, the balance in any savings, retirements, and checking and other investment accounts. Once you have the sum, you need to deduct all your debt, including credit card balances, mortgage balance, and any other loans.Another financial term you need to know about is asset allocation which refers to where one decides to put their money. Assets can be grouped into stocks, cash, and bonds. Every group respond differently to conditions in the economy and market. Learn more from https://www.reference.com/article/personal-finance-e26040570bbd709e?aq=Finance&qo=cdpArticles.