Definitions for APY, APR, compound interest, simple interest, principal, yield, diversification, liquidity, portfolio, and ROI.
- APY includes compounding, while APR usually states an annual rate before compounding effects.
- Principal, contributions, and interest earned are separated so users can see where the projected balance comes from.
- Risk, diversification, liquidity, and ROI help frame the projection as a planning example rather than a guarantee.