Glossary

A calculator that uses a word without explaining it assumes something about its reader. These are the words this site uses, in one sentence each, with a link to the tool that uses the term.

A

Amortization: Paying a debt down through scheduled payments whose interest share falls over time while their principal share rises, so the balance moves slowly at first and quickly at the end.; Amortization Schedule Calculator
APR: The annual percentage rate: the interest rate plus lender fees that are treated as finance charges, expressed as one yearly rate. It is a comparison figure, not the rate used to compute a payment.; APR Calculator

B

Balloon payment: A single large payment due at the end of a loan whose scheduled payments do not fully repay it, common in some car and business financing.; Loan Calculator
Basis point: One hundredth of a percentage point. A rate moving from 6.50 to 6.75 percent has risen 25 basis points.; Refinance Calculator
Break-even: The point at which the money spent so far has been recovered - used for refinancing costs, a system that produces electricity, or a subscription against its alternative.; ROI Calculator
Bridge-the-gap alimony: Short-term support meant to cover one specific transition after a divorce, capped by Florida's statute at two years - a limit on how long it may run, with no formula anywhere for the amount.; Alimony Calculator

C

Capital gain: The profit on an asset sold for more than its cost basis, taxed in the year of the sale.; Capital Gains Tax Calculator
Compound interest: Interest that is added to the balance and then earns interest itself, which is why time matters more than the rate over long horizons.; Compound Interest Calculator

D

Debt-to-income ratio: Monthly debt payments divided by gross monthly income. Lenders use it as a capacity test, and housing payments usually count towards the same total.; Debt-to-Income Calculator
Deductible: The amount an insured person pays towards a covered cost before the insurer pays its share, usually reset each policy year.; Health Insurance Deductible Calculator
Degradation: The slow loss of output a solar panel shows year after year, typically quoted as a percentage of the first year of production.; Solar Calculator
Down payment: The part of a purchase price paid in cash rather than borrowed, which reduces both the loan and, on a mortgage, the cost of insuring it.; Mortgage Calculator
Durational alimony: Support paid for a fixed period set by the length of the marriage: Florida caps it at 50, 60 or 75 percent of the marriage depending on which band it falls in, and rules it out below three years.; Alimony Calculator

E

Effective annual rate: What a nominal annual rate becomes once compounding is counted: 12 percent compounded monthly is about 12.68 percent a year.; APR Calculator
Escrow: An account a lender holds to pay property tax and insurance on your behalf, funded by part of each monthly mortgage payment.; Property Tax Calculator
Expense ratio: The annual fee a fund charges as a percentage of the money invested in it. It is charged inside the fund, so it never arrives as a bill.; 401(k) Rollover Calculator

F

FICA: The federal payroll taxes for Social Security and Medicare, withheld from wages and matched by the employer, up to an annual wage base for the Social Security part.; Payroll Tax Calculator

G

Gross income (child support): Everything earned or received before deductions. Some states apply their child support percentage to this figure and others start from net income, which moves the answer more than the percentage itself does.; Child Support Calculator
Gross pay and net pay: Gross is what was earned before deductions; net is what arrives in the bank after tax withholding and benefit deductions.; Paycheck Calculator

I

Income shares: A child support model where each parent pays their share of a published table amount, the share being their part of the two incomes combined - so the order follows the income split rather than a fixed percentage.; Child Support Calculator

K

Kilowatt-hour: One kilowatt of power used for one hour - the unit on an electricity bill, and the unit a solar system is credited with producing.; Solar Calculator

L

Loan-to-value: The loan amount divided by the property value. A higher ratio means less equity, and often a higher rate or mortgage insurance.; Home Affordability Calculator

M

Marginal tax rate: The rate applied to the next dollar of income. It is not the average rate, which is total tax divided by total income.; Income Tax Calculator
Minimum payment: The smallest amount a card issuer will accept each month, usually a small percentage of the balance plus interest - which is why a balance can last years at that pace.; Credit Card Payoff Calculator

N

Net income (child support and alimony): Income after the deductions a state's own definition allows - taxes, mandatory retirement contributions, and sometimes support paid for other children. Both calculators here treat it as an input rather than deriving it.; Alimony Calculator

P

Payback period: How long it takes for the savings from something to equal what it cost, measured in years and never guaranteed.; Solar Calculator
Principal: The amount borrowed or invested, separate from the interest it earns or costs.; Loan Calculator
Private mortgage insurance: Insurance a lender may require when the down payment is small. The borrower pays for it, and it protects the lender rather than the household.; Mortgage Calculator

R

Refinancing: Replacing an existing loan with a new one, usually at a different rate or term. The interest saved has to exceed the closing costs.; Refinance Calculator
Rehabilitative alimony: Support paid while the receiving spouse completes a plan to become self-supporting, such as a degree or a license. Florida caps it at five years and derives no amount from the incomes at all.; Alimony Calculator
Required minimum distribution: The amount that must come out of a tax-deferred retirement account each year from a set age, whether or not the money is needed.; Retirement Calculator
Roth and traditional: Traditional contributions are deducted now and taxed on withdrawal; Roth contributions are taxed now and withdrawn tax-free.; Roth vs Traditional Calculator

W

Withholding: Tax an employer or plan sends to the government on your behalf during the year. It is a payment towards the year of tax, not the final bill.; Paycheck Calculator

Definitions are about the words, not about what you should do. Read the full disclaimer.