Plain-English definitions for every term our calculators use — no jargon left unexplained.
The interest rate on a loan plus most of its mandatory fees, expressed as one annualized percentage — meant to show the loan's true total cost, not just the rate used to calculate your monthly payment.
Read the full explanation →The process of paying off a loan through regular fixed payments, where each payment covers that period's interest first, with the remainder reducing the principal. Early payments are mostly interest; later payments are mostly principal.
Read the full explanation →The original amount borrowed (or still owed), not counting interest. Your monthly payment is calculated from the principal, the interest rate, and the loan term.
Loan Calculator →The percentage a lender charges annually for the money you've borrowed. This is the number that directly determines your monthly payment, distinct from APR, which also folds in fees.
Loan Calculator →How long you have to repay a loan, usually expressed in months or years. A longer term lowers your monthly payment but increases total interest paid over the life of the loan.
The upfront amount you pay toward a purchase before financing the rest. A larger down payment reduces the amount you finance, lowering both your monthly payment and total interest.
Mortgage Calculator →The amount a dealer credits you for an existing vehicle when financing a new one, subtracted from the purchase price before calculating the loan amount.
Auto Loan Calculator →Insurance a mortgage lender typically requires when your down payment is less than 20% of the home's price, protecting the lender (not you) if you default. It's added to your monthly payment and can usually be removed once you reach 20% equity.
Mortgage Calculator →The smallest amount a credit card issuer requires you to pay each month, typically around 2% of your balance or a small flat floor like $25, whichever is greater. Paying only the minimum can take years longer and cost far more in interest than a larger fixed payment.
Debt Payoff Calculator →When you owe more on a loan than the asset (typically a car) is currently worth — common early in a car loan, since vehicles depreciate faster than a long loan term pays down the balance.
Auto Loan Calculator →The tax rate applied to the last dollar you earn — the top bracket your income reaches. It does not apply to your entire income, only the portion within that top bracket.
Read the full explanation →Your total tax bill divided by your total income — the real, blended average rate you actually pay, which is always lower than your marginal rate.
Read the full explanation →A fixed dollar amount the IRS lets you subtract from your income before calculating tax, without needing to itemize individual expenses. Most filers use this rather than itemizing.
US Tax Calculator →A category (Single, Married Filing Jointly, Head of Household, Married Filing Separately) that determines which tax brackets and standard deduction apply to you.
US Tax Calculator →The combined US payroll tax for Social Security and Medicare, withheld automatically from every paycheck. It's a flat percentage (with a cap on the Social Security portion), separate from federal and state income tax.
Salary Calculator →Canada Pension Plan and Employment Insurance — the Canadian equivalent of FICA, deducted automatically from every paycheque alongside federal and provincial income tax.
Canada Tax Calculator →The amount of income a Canadian resident can earn before paying any federal income tax — functionally similar to the US standard deduction, though structured as a tax credit rather than a deduction.
Canada Tax Calculator →Gross income is what you earn before any deductions. Net income (take-home pay) is what's left after income tax, payroll tax, and any other withholdings — the amount that actually reaches your bank account.
Salary Calculator →Biweekly means paid every two weeks (26 paychecks a year, with two three-paycheck months annually). Semi-monthly means paid twice a month on fixed dates like the 1st and 15th (24 paychecks a year, always two per month).
Salary Calculator →Interest calculated on both your original balance and any interest already earned — meaning your money earns interest on its own interest over time, growing faster the longer it's left to compound.
Read the full explanation →Interest calculated only on the original principal, every period, with no growth from previously earned interest. This is the mathematical opposite of compound interest.
Read the full explanation →What a sum of money today (or a series of contributions) will be worth at a specified point in the future, after accounting for interest or investment growth.
Compound Interest Calculator →How often interest is calculated and added to a balance — annually, monthly, or daily. More frequent compounding produces a slightly higher effective return on the same stated rate.
Compound Interest Calculator →A percentage-based tax added to the price of goods at the point of sale, set by state, provincial, or local governments and varying widely by location.
Auto Loan Calculator →The percentage subtracted from an original price to reach a sale price. Two discounts applied one after another do not simply add together — the second discount applies to the already-reduced price.
Discount Calculator →How much a value has increased or decreased, expressed as a percentage of its original value — calculated as the difference divided by the original amount.
Percentage Calculator →