Compound Interest Interest that accrues on the initial principal and the accumulated interest of a principal deposit, loan or debt.

Consumption The using up of goods and services by consumer purchasing or in the production of other goods

Disposable Income The amount of money that households have available for spending and saving after income taxes have been accounted for.

Income Economic wealth that is generated in exchange for an individual's performance of agreed upon activities or through investing capital. Income is consumed to fuel day-to-day expenditures.

Principal The original amount invested, separate from earnings.

Rule of 72 A rule stating that in order to find the number of years required to double your money at a given interest rate, you divide the compound return into 72. The result is the approximate number of years that it will take for your investment to double.

Saving The amount left over when the cost of a person's consumer expenditure is subtracted from the amount of disposable income that he or she earns in a given period of time

Simple Interest A quick method of calculating the interest charge on a loan. Interest is determined by multiplying the interest rate by the principal by the number of periods.

Human Capital A measure of the economic value of an employee's skill set

Investment in human capital Education

Opportunity Cost The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.