Financial Dictionary
Plain-English definitions for every calculator term — APR, amortization, ISA, superannuation, and more — each with an example and a link to the tool.
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A
Amortization
The schedule of payments that gradually pays off a loan's principal and interest.
Annuity
A financial product that converts a lump sum into a stream of regular payments.
APR (Annual Percentage Rate)
The yearly cost of borrowing, including interest and most fees, expressed as a single percentage.
B
C
CAGR (Compound Annual Growth Rate)
The steady annual growth rate that would take an investment from its starting value to its ending value.
Capital Gains
The profit from selling an asset for more than you paid for it.
Closing Costs
Fees paid at the end of a real estate transaction, on top of the down payment.
Compound Interest
Interest calculated on both the original amount and the interest already earned.
Credit Utilization
The percentage of your available credit that you're currently using.
D
Debt Consolidation
Combining multiple debts into a single new loan, ideally at a lower overall rate.
Debt-to-Income Ratio (DTI)
The share of your gross monthly income that goes toward debt payments.
Diversification
Spreading investments across different assets so no single one can sink the whole portfolio.
Dividend Yield
The annual dividend income an investment pays, as a percentage of its price.
Dollar-Cost Averaging (DCA)
Investing a fixed amount on a regular schedule, regardless of price.
Down Payment
The upfront cash a buyer puts toward a purchase, with the rest financed by a loan.
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M
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P
R
Real vs. Nominal Return
Nominal return is the raw percentage gain; real return subtracts inflation to show actual purchasing-power growth.
Refinancing
Replacing an existing loan with a new one, usually to get a better rate, lower payment, or different term.
Roth IRA
A US retirement account funded with after-tax dollars, where qualified withdrawals in retirement are tax-free.
Rule of 72
A quick mental-math shortcut for estimating how long it takes an investment to double.
S
Safe Withdrawal Rate
The percentage of a retirement portfolio you can withdraw each year with a low risk of running out of money.
Sequence of Returns Risk
The danger that a market downturn early in retirement does outsized damage to how long savings last.
Simple Interest
Interest calculated only on the original principal, never on interest already earned.
Social Security PIA (Primary Insurance Amount)
The monthly Social Security benefit you'd receive if you claim exactly at your full retirement age.
Standard Deduction
A fixed amount of income the IRS lets you subtract before calculating tax, with no receipts required.