**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.