Accrued interest
Interest that has been earned on a security or loan but not yet paid. Bonds are quoted clean, without it, and settle dirty, with it added to the amount that changes hands.
Open related calculator →Financial definitions with working formulas
Financial calculator glossary
174 plain-language financial definitions, 155 of them linked straight to the calculator that computes the figure — a definition is never a dead end. Each entry opens to its own page with a worked example, the common error and where the term turns up in real decisions.
Where the vocabulary sits
Glossary of defined terms by first letter
The twelve most common starting letters across the glossary.
- Terms starting with A11 terms
- Terms starting with B14 terms
- Terms starting with C20 terms
- Terms starting with D14 terms
- Terms starting with E9 terms
- Terms starting with F7 terms
- Terms starting with G7 terms
- Terms starting with H5 terms
- Terms starting with I4 terms
- Terms starting with L4 terms
- Terms starting with M11 terms
- Terms starting with N5 terms
- Terms starting with O5 terms
- Terms starting with P12 terms
- Terms starting with Q2 terms
- Terms starting with R11 terms
- Terms starting with S13 terms
- Terms starting with T9 terms
- Terms starting with U1 terms
- Terms starting with V3 terms
- Terms starting with W4 terms
- Terms starting with Y1 terms
- Terms starting with Z2 terms
A
Adjusted gross income
Total income less specific adjustments permitted before deductions are applied. Many credits and phase-outs are measured against it, not against taxable income.
Open related calculator →After-tax return
The return that remains once tax on income, distributions and gains is deducted. It is the only return an investor keeps, and it can rank two investments differently from their gross figures.
Open related calculator →Amortization
The scheduled process of reducing a loan balance through payments that cover interest and principal.
Open related calculator →Amortization schedule
The payment-by-payment table. It shows how each payment divides between interest and principal, and what balance remains after each one.
Open related calculator →Annual percentage rate (APR)
An annualized borrowing-cost measure that may include the interest rate and certain finance charges.
Open related calculator →Annual percentage yield (APY)
The effective annual deposit yield after the stated compounding frequency.
Open related calculator →Annual recurring revenue (ARR)
A recurring-revenue run rate commonly calculated as monthly recurring revenue multiplied by twelve.
Open related calculator →Annualized return
The compound yearly rate that links a beginning value to an ending value across a holding period.
Open related calculator →Annuity
A series of equal payments made at regular intervals. An ordinary annuity pays at the end of each period. An annuity due pays at the start. That gives every payment one extra period of growth.
Open related calculator →Asset allocation
The distribution of a portfolio among asset classes or risk exposures.
Open related calculator →B
Balloon payment
A large final payment remaining after smaller scheduled loan payments.
Open related calculator →Basal metabolic rate
The energy the body uses at complete rest to maintain basic functions, before any activity is added.
Open related calculator →Basis point
One hundredth of one percentage point; 100 basis points equal 1 percentage point.
Open related calculator →Bear market
A sustained decline in a market, commonly defined as a fall of twenty percent or more from a recent peak. The twenty percent is a convention. Nothing technical marks that line.
Beta
A measure of how much an asset has moved relative to a benchmark. A beta above one indicates larger swings than the benchmark historically, not a prediction that it will continue.
Billable utilization
Billable hours divided by available working hours over the same period.
Open related calculator →Blood alcohol concentration (BAC)
The percentage of alcohol in the bloodstream, estimated by formula from drinks consumed, body weight, sex and elapsed time, or measured directly by breath or blood test.
Open related calculator →Body mass index
Weight relative to the square of height, used as a population-level screening measure. It does not distinguish muscle from fat.
Open related calculator →Body surface area
The total external surface area of the body, estimated from height and weight. Some clinical dosing and burn assessment work from it.
Open related calculator →Bond coupon
The cash interest payment a bond makes on each scheduled date. The coupon rate applied to face value sets its size. Rate is the percentage. Coupon is the money that changes hands.
Open related calculator →Bond duration
A present-value-weighted timing measure used to approximate bond-price sensitivity to yield changes.
Open related calculator →Book value
The value of an asset in the accounts, generally cost less accumulated depreciation. It frequently differs from market value, and the gap matters when an asset is sold.
Break-even point
The volume at which total revenue equals total costs. It moves whenever the cost structure changes. Treat it as a range, not a point: fixed costs are only fixed within a capacity band.
Open related calculator →Burn rate
The rate at which an organization consumes cash, often measured monthly.
Open related calculator →C
Capital expenditure
Spending on assets with a useful life beyond the current period, capitalised and depreciated, not expensed immediately. In property, the reserve for roofs, systems and appliances.
Capital gains
The difference between disposition proceeds and adjusted basis after applicable selling costs.
Open related calculator →Capitalization rate
A property’s annual net operating income divided by its price or value.
Open related calculator →Cash conversion cycle
Inventory days plus receivable days minus payable days.
Open related calculator →Cash-on-cash return
Annual pre-tax property cash flow divided by the cash invested.
Open related calculator →CIDR notation
The slash-prefix shorthand (e.g. /24) that states how many leading bits of an IP address are the fixed network portion. A smaller number after the slash means a larger network with more usable addresses.
Open related calculator →Collateral
An asset pledged to secure a loan, which the lender can claim on default. Its presence lowers lender risk and usually the rate, at the cost of the asset being at stake.
Combination
A selection of items where order does not matter. Choosing 3 people for a committee from a group is a combination problem.
Open related calculator →Compound annual growth rate (CAGR)
The constant annual rate that would link a beginning value to an ending value over a period.
Open related calculator →Compound interest
Growth calculated on principal and accumulated prior growth.
Open related calculator →Compounding frequency
How often accrued interest is added to the balance so it begins earning in turn. More frequent compounding raises the effective rate, with a hard ceiling at continuous compounding.
Open related calculator →Confidence interval
A range built from sample data. It is likely to contain the true population value at a stated confidence level, commonly 95%.
Open related calculator →Contribution margin
Revenue remaining after variable costs, available to cover fixed costs and profit.
Open related calculator →Convexity
The curvature of the relationship between a bond's price and its yield. It corrects duration, which is a straight-line approximation and grows less accurate as the yield move gets larger.
Open related calculator →Cost basis
The amount used to measure gain or loss on disposal, generally purchase price plus certain adjustments. An incorrect basis produces an incorrect gain and an incorrect tax figure.
Coupon rate
The annual interest a bond pays as a percentage of its face value. It is fixed at issue, which is why the price must move when market yields change.
Open related calculator →Credit hour
A unit measuring the classroom time or coursework value of a course. Each grade is weighted by it in a GPA calculation.
Open related calculator →Credit utilization
Reported revolving credit balances divided by total reported revolving credit limits.
Open related calculator →Current ratio
Current assets divided by current liabilities.
Open related calculator →Current yield
A bond’s annual coupon cash flow divided by its current market price.
Open related calculator →D
Debt-service coverage ratio (DSCR)
Income available for debt service divided by required debt service.
Open related calculator →Debt-to-income ratio (DTI)
Required monthly debt payments divided by gross monthly income.
Open related calculator →Deductible
The amount paid toward covered costs before an insurer begins paying. It sits ahead of coinsurance in the payment sequence and below the out-of-pocket maximum.
Open related calculator →Depreciation
The allocation of an asset's cost across its useful life. An accounting and tax concept distinct from the asset's actual change in market value.
Open related calculator →Determinant
A single number computed from a square matrix that determines whether it can be inverted. A zero determinant means the matrix has no inverse.
Open related calculator →Dew point
The temperature air would need to cool to for it to become fully saturated with the moisture it currently holds. A higher dew point means more humid, muggier air.
Open related calculator →Discount rate
The rate used to convert future cash flows into present value.
Open related calculator →Discriminant
The b²−4ac term inside the quadratic formula, calculated before taking the square root. Its sign alone tells you what kind of solution to expect. Positive means two distinct real roots. Zero means one repeated real root. Negative means no real roots at all, only a complex pair, and those fall outside what a real-number calculator can display.
Open related calculator →Diversification
Holding assets whose returns do not move together, reducing exposure to any single holding. It reduces specific risk and does not remove market-wide risk.
Dividend yield
Annual dividends as a percentage of share price. It rises when the price falls. So a high yield can signal a falling price. It is not always a generous distribution.
Open related calculator →Dollar-cost averaging
Investing a fixed amount on a recurring schedule regardless of market price.
Open related calculator →Drawdown
The percentage decline from a prior peak to a subsequent trough.
Open related calculator →Duration
The umbrella term for how long a bond's money effectively takes to arrive. That timing decides how much its price moves when yields change. Two specific forms exist and they are not interchangeable. Macaulay duration is a present-value-weighted time in years. Modified duration is a percentage price sensitivity. Longer maturity and lower coupon increase both.
Open related calculator →DV01
The approximate dollar price change of a bond or portfolio for a one-basis-point yield change.
Open related calculator →E
Effective annual rate
The annual rate accounting for compounding within the year. The figure that makes two differently-compounded quotes genuinely comparable.
Open related calculator →Effective tax rate
Estimated total tax divided by the selected income measure.
Open related calculator →Emergency fund
Liquid money reserved for income disruption or genuinely unexpected essential expenses.
Open related calculator →Enterprise value
A business value measure representing operating assets before allocating value between debt and equity.
Open related calculator →Epoch day
A whole-number count of days since January 1, 1970. Date calculators use it internally, so date arithmetic reduces to integer subtraction.
Open related calculator →Equity
The owner's share of an asset's value after debts against it. In property, value less the outstanding balance; in a company, assets less liabilities.
Open related calculator →Escrow
An account holding funds for property tax and insurance, paid out when due. It changes the timing of those costs, never the total.
Open related calculator →Exchange rate
The price of one currency stated in units of another. Published reference rates like the ECB's are the neutral benchmark. A bank, card network or exchange adds its own spread on top of that.
Open related calculator →Expense ratio
An investment fund’s annual operating expenses expressed as a percentage of assets.
Open related calculator →F
Face value
The amount a bond repays at maturity, also called par. Coupons are calculated on it, and market price can sit above or below it.
Open related calculator →Factorial
The product of a whole number and every positive whole number below it, written n!. Used to count arrangements and combinations; 0! is defined as 1.
Open related calculator →Fiduciary
A party legally obliged to act in another's best interest. The standard is higher than suitability, which requires only that a recommendation be appropriate.
Financial independence (FIRE)
A condition in which assets and other dependable income are modeled to support ongoing spending without employment income.
Open related calculator →Fixed cost
A cost that does not vary with output within a given capacity range. Cross that range and it steps up.
Open related calculator →Free cash flow
Cash from operations less capital expenditure: what the business generates after maintaining its asset base. Distinct from profit, which is an accrual measure.
Future value
The modeled value of money at a future date after growth and cash flows.
Open related calculator →G
Gestational weight gain
Weight gained during pregnancy, The recommended range is set by pre-pregnancy BMI category. There is no single target for everyone.
Open related calculator →Glomerular filtration rate (GFR)
A measure of how well the kidneys filter blood. It is usually estimated from a blood creatinine level, age and sex. Direct measurement is rare.
Open related calculator →Grade point average (GPA)
Total quality points earned divided by total credit hours attempted, most commonly on a 4.0 scale. No single national standard exists: schools set their own scale and rounding.
Open related calculator →Greatest common factor (GCF)
The largest number that divides two or more numbers evenly. It reduces fractions and ratios to their smallest whole-number form.
Open related calculator →Gross margin
Revenue minus cost of goods sold, divided by revenue.
Open related calculator →Gross rent multiplier (GRM)
Property price divided by annual gross rent before expenses.
Open related calculator →Gross revenue retention (GRR)
Recurring revenue retained from a starting cohort after churn and contraction, excluding expansion.
Open related calculator →H
Heart-rate reserve
The difference between maximum and resting heart rate. The Karvonen method uses it to scale a target training intensity to an individual's own range.
Open related calculator →Heat index
A calculated "feels-like" temperature that combines air temperature and relative humidity to estimate how hot the body actually perceives conditions to be.
Open related calculator →Heron's formula
A method for calculating a triangle's area from its three side lengths alone, without needing a separate height measurement. The method computes the semi-perimeter, half the sum of the three sides, then combines it with each side under a square root. Unlike the base-times-height formula, it applies to any triangle. Right, obtuse or scalene. The only condition is that the three lengths can actually form one.
Open related calculator →Home equity
Property value less debts secured by the property.
Open related calculator →Home equity line of credit
A revolving credit line secured by property, usually at a variable rate. A draw period comes first, then a repayment period. The payment usually rises sharply at the handover.
Open related calculator →I
Index fund
A fund that tracks a published index instead of selecting holdings. Its case rests on low cost and broad exposure, not on selection skill.
Inflation
The rate at which prices rise and purchasing power falls. It compounds, which is why long-horizon plans built on nominal figures overstate what will be affordable.
Open related calculator →Interest-only period
A phase during which payments cover only accruing interest and the balance does not fall. The later payment rises twice over: amortization begins, and over fewer remaining years.
Open related calculator →Internal rate of return (IRR)
A discount rate that sets the net present value of modeled cash flows to zero.
Open related calculator →L
Lean body mass
Total body weight minus estimated fat mass, covering muscle, bone, organs and water.
Open related calculator →Least common multiple (LCM)
The smallest number that two or more numbers all divide into evenly. Used for common denominators and for aligning repeating cycles.
Open related calculator →Liquidity
How quickly an asset converts to cash without a material loss of value. An asset can be valuable and illiquid, which is what makes reserves necessary.
Loan-to-value ratio (LTV)
Loan balance divided by property value.
Open related calculator →M
Macronutrient
One of the three nutrients supplying dietary energy, protein, carbohydrate and fat, each with a different calories-per-gram value.
Open related calculator →Margin of error
The plus-or-minus range added to a sample estimate to build a confidence interval. Sample size, variability and the chosen confidence level drive it.
Open related calculator →Marginal tax rate
The tax rate applied to the next dollar within a simplified bracket analysis.
Open related calculator →Markup
Selling price minus cost, divided by cost.
Open related calculator →Maximum drawdown
The largest peak-to-trough decline over a period. It describes the worst moment an investor had to sit through, which predicts abandonment better than volatility does.
Open related calculator →Metabolic equivalent (MET)
A unit expressing the energy cost of an activity as a multiple of resting metabolic rate. A MET of 1 approximates sitting quietly.
Open related calculator →Modified duration
Macaulay duration divided by one plus yield per payment period; a first-order estimate of price sensitivity.
Open related calculator →Molarity
The concentration of a solution expressed as moles of dissolved solute per liter of solution.
Open related calculator →Money factor
How a lease expresses its finance charge. Multiply by 2,400 for an approximate equivalent annual interest rate.
Open related calculator →Money-weighted return
A return measure affected by the timing and amount of investor-controlled cash flows.
Open related calculator →Monthly recurring revenue (MRR)
Recurring subscription value normalized to one month under a stated revenue policy.
Open related calculator →N
Naegele's rule
The standard obstetric convention for estimating a due date: 280 days, or 40 weeks, after the first day of the last menstrual period. It assumes a textbook 28-day cycle and is superseded by ultrasound dating when the two disagree.
Open related calculator →Net operating income (NOI)
Property operating income after operating expenses and before financing, depreciation and investor income tax.
Open related calculator →Net present value
The sum of future cash flows discounted to today, less the initial outlay. A positive figure indicates the flows exceed the required return at the chosen discount rate.
Open related calculator →Net revenue retention
Revenue from an existing customer cohort at period end against its start. Expansion, contraction and churn count. New customers do not.
Open related calculator →Nominal rate
A quoted rate before adjusting for compounding frequency or inflation. Comparing a nominal rate to a real one is a common source of a plan that appears funded and is not.
O
Ohm's law
The relationship V = I × R linking voltage, current and resistance in a purely resistive electrical circuit.
Open related calculator →One-rep max
The heaviest weight a person can lift for one complete repetition. Usually estimated from a lighter set taken near failure.
Open related calculator →Opportunity cost
The value of the best alternative forgone. It is why a deposit that builds equity is not free: the same cash could have been invested elsewhere.
Origination fee
A charge for processing a loan, deducted from proceeds or added to the balance. It changes effective cost without changing the payment, which is what APR captures.
Open related calculator →Out-of-pocket maximum
The most a plan requires you to pay toward covered in-network care in a year. The figure that defines the worst case when comparing health plans.
Open related calculator →P
Password entropy
A measure, in bits, of how unpredictable a password is: the base-2 logarithm of how many equally likely passwords share the same length and character pool. Higher entropy means an exhaustive guessing attack takes longer on average.
Open related calculator →Payback period
The time for cumulative cash inflows to recover an initial outlay. Simple and blind to everything that happens after recovery.
Open related calculator →Percent error
How far a measured value sits from the known or theoretical one. Expressed as a percentage of the theoretical value.
Open related calculator →Permutation
An arrangement of items where order matters. Picking a first, second and third place from a group is a permutation problem.
Open related calculator →Points
An upfront charge, each typically one percent of the loan, paid to lower the rate. Worthwhile only if the loan is held past the break-even.
Open related calculator →Pre-pregnancy BMI
Body mass index calculated from weight before conception, used as the standard starting point for recommended pregnancy weight-gain ranges.
Open related calculator →Prepayment penalty
A charge for repaying a loan early, which reduces or eliminates the saving from paying ahead. Its presence should be checked before assuming early payoff saves the remaining interest.
Open related calculator →Present value
The current amount equivalent to a future cash flow under a selected discount rate.
Open related calculator →Prime factorization
Breaking a number down into the prime numbers that multiply together to produce it. Every whole number greater than 1 has exactly one such breakdown.
Open related calculator →Principal
The amount borrowed or invested, before interest. Interest on an amortizing loan is charged on the outstanding principal, which is why early payments are mostly interest.
Open related calculator →Private mortgage insurance (PMI)
Insurance that may be required on certain conventional mortgages with higher loan-to-value ratios.
Open related calculator →Progressive tax
A system where higher slices of income are taxed at higher rates. Crossing a bracket reprices only the income above the threshold, never what came before.
Open related calculator →Q
Quality points
A course's grade points multiplied by its credit hours; quality points summed across courses, divided by total credit hours, produce GPA.
Open related calculator →Quick ratio
Quick assets divided by current liabilities, generally excluding inventory.
Open related calculator →R
Radian
A unit of angle based on the radius of a circle: one full turn equals 2π radians. Trigonometric functions in most programming languages expect radians, not degrees.
Open related calculator →Real rate of return
The return after inflation: the only measure describing a change in purchasing power. A healthy nominal return during similar inflation is no real gain at all.
Rebalancing
Restoring a portfolio to its target allocation by selling what has risen and buying what has fallen. The discipline, not the timing, is the benefit.
Recast
Recalculating a loan payment after a lump-sum principal reduction, keeping the original term. It lowers the payment where prepaying alone would shorten the term instead.
Open related calculator →Refinance
Replacing an existing loan with a new one, resetting the term and incurring closing costs. The only one of prepay, recast and refinance that can change the rate.
Open related calculator →Required minimum distribution (RMD)
A minimum retirement-account distribution calculated under current rules using an applicable balance and life-expectancy factor.
Open related calculator →Return on ad spend (ROAS)
Revenue attributed to advertising divided by advertising spend.
Open related calculator →Return on investment (ROI)
Net gain divided by the investment cost used as the denominator.
Open related calculator →Risk-free rate
The return on an asset assumed to carry no default risk, used as the baseline in risk-adjusted measures. Changing which rate is used changes every such measure.
Roofing square
A roofing-industry unit equal to 100 square feet of roof surface. Shingles and underlayment are priced and packaged by it. A typical bundle of asphalt shingles covers roughly a third of a square. So estimates are given in squares first. Conversion to bundles or rolls comes afterward, once the specific product's coverage rate is known.
Open related calculator →Runway
The estimated time available before unrestricted cash is depleted at a modeled net burn rate.
Open related calculator →S
Safe harbor
A payment threshold that can reduce estimated-tax underpayment exposure when current rules are met.
Open related calculator →Seller’s discretionary earnings (SDE)
A small-business earnings measure that may add back one owner’s compensation and selected discretionary or nonrecurring items.
Open related calculator →Serum creatinine
A waste product from muscle metabolism, measured in blood. Most eGFR equations use it as their primary input, because the kidneys are the main route it leaves the body.
Open related calculator →Sharpe ratio
Excess return divided by total return volatility for the same measurement period.
Open related calculator →Simple interest
Interest charged only on the original principal, never on accumulated interest. Distinct from amortizing interest, which is charged on the declining balance.
Open related calculator →Sinking fund
Money accumulated gradually for a known future expense.
Open related calculator →Solo 401(k)
A 401(k) for a self-employed person or owner-only business. One person contributes as both employee and employer. That dual capacity is why it can exceed a SEP IRA at the same income.
Open related calculator →Sortino ratio
Excess return divided by downside deviation relative to a target.
Open related calculator →Specific gravity
A substance's density relative to water. Values above 1 sink in water; values below 1 float.
Open related calculator →Standard deduction
A fixed amount subtracted from income instead of itemising. Because it is substantial, many households receive no incremental benefit from deductible expenses.
Open related calculator →Standard deviation
A measure of how spread out a set of values is around its mean. A small standard deviation means values cluster tightly; a large one means they scatter widely.
Open related calculator →Standard drink
A reference serving containing a fixed amount of pure alcohol (14 grams in the United States), used to compare drinks of different type and size on a common basis.
Open related calculator →Subnet mask
A 32-bit value that marks which bits of an IP address are the network portion versus the host portion. A wildcard mask is its exact bitwise inverse.
Open related calculator →T
Tax-deferred
An arrangement where tax is postponed until withdrawal instead of being paid as growth occurs. The full amount compounds in the meantime.
Tax-equivalent yield
The taxable yield needed to equal a tax-exempt yield at an assumed marginal tax rate.
Open related calculator →Term
The length of a loan or the period of an insurance policy. On a loan it is the strongest lever on total cost and the weakest on the payment.
Open related calculator →Time value of money
The principle that money available now is worth more than the same amount later, because it can earn a return. The foundation under discounting and present value.
Open related calculator →Time-weighted return
A linked return measure designed to reduce the effect of external cash-flow timing.
Open related calculator →Total cost of ownership
Every cost of owning an asset over its life, purchase, financing, insurance, fuel, maintenance, repairs and disposal, not just the payment.
Open related calculator →Total daily energy expenditure
Basal metabolic rate multiplied by an activity factor: an estimate of total calories burned in a day including movement and exercise.
Open related calculator →Training pace
Speed expressed as time per unit distance, not distance per unit time. Minutes per mile is the common U.S. running convention.
Open related calculator →Turnover
How much of a portfolio is traded in a year. High turnover implies higher internal trading costs and, in a taxable account, more distributions and more current tax.
U
Underwater
Owing more on an asset than it is worth. Common early in a long vehicle loan because depreciation is front-loaded while principal reduction is not.
Open related calculator →V
Variable cost
A cost that changes with output. Subtracted from price to give contribution margin, the figure that drives break-even.
Open related calculator →Vesting
The process by which a right to an asset or contribution becomes non-forfeitable over time. Unvested employer contributions are lost if employment ends first.
Open related calculator →Volatility
The dispersion of returns around their average, usually standard deviation. It treats gains and losses identically, which is why it is a poor standalone definition of risk.
Open related calculator →W
Waist-to-hip ratio
Waist circumference divided by hip circumference, used alongside BMI to describe where body fat is carried.
Open related calculator →Weighted average cost of capital
The blended cost of a company's debt and equity financing, weighted by their proportions. The usual discount rate for evaluating a company's own investments.
Weighted GPA
A GPA variant that adds bonus grade points before averaging, so harder courses can outscore easier ones. Honors commonly earns +0.5 and AP, IB or college-level work +1.0. The bonus and cap vary by school.
Open related calculator →Working capital
Current assets minus current liabilities.
Open related calculator →Y
Yield to maturity (YTM)
The discount rate that equates a bond’s scheduled cash flows to its market price under stated assumptions.
Open related calculator →Z
Z-score
How many standard deviations a value sits from the mean of its distribution. A z-score of 2 means the value is two standard deviations above average.
Open related calculator →Zero-coupon bond
A bond paying no periodic interest, bought below face value and maturing at face. Its entire return is the difference, which makes it unusually sensitive to rate changes.
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