Financial Dictionary
Clear, mathematically verified definitions of complex financial terms, mortgage metrics, debt ratios, and investment formulas—explained in plain English.
Amortization
The gradual repayment of a debt balance through regular installment payments over a specified time period.
Compound Interest
Interest calculated on the initial principal balance plus all accumulated interest from previous periods.
Debt-to-Income (DTI) Ratio
The percentage of your gross monthly income that goes toward paying monthly debt obligations.
Cash Flow
The net amount of cash and cash-equivalents moving into and out of a household, business, or investment account.
Cash Flow Index (CFI)
A mathematical formula used to rank debt accounts by efficiency to determine optimal debt payoff order.
Free Cash Flow (FCF)
The cash a company or household generates after accounting for cash outflows that support operations and capital expenditures.
Compound Annual Growth Rate (CAGR)
The annualized rate of return required for an investment to grow from its beginning balance to its ending balance.
Private Mortgage Insurance (PMI)
A policy that protects lenders against loss if a conventional loan borrower defaults, typically required when down payment is under 20%.
Annual Percentage Rate (APR)
The annualized cost of borrowing money, including interest rates and upfront loan fees.
Net Worth
The total dollar value of all financial and physical assets owned minus all liabilities owed.
Interactive Cash Flow & Debt Tools
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