Math 1 · Unit 8 · Lesson 1 · part 1 of 5

The Words We Use

The vocabulary for this lesson, in one place.

Words we use

Word	Plain English	What you do
Principal	The money you start with, the amount you put in (or borrow). The letter P.	It is the starting value, the y-intercept of the line.
Interest	The extra money earned on savings, or paid on a loan. The letter I.	I = Prt for simple interest.
Interest rate	The percent paid each year. The letter r.	Write it as a decimal to calculate: 5% is 0.05.
Simple interest	Interest paid on the principal only, the same amount every year.	Adds the same dollars each year: a line.
Balance	How much is in the account now. The letter A.	A = P + Prt.
Constant difference	The same amount added each step: the line pattern from Unit 7.	Here it is Pr dollars each year, the slope.