Canadian Financial, Real Estate and Mortgage Glossary

Accrue

Definition of accrue

Related Terms and Acronyms:

• accrued interest   Interest which has already been earned but has not yet been paid.
• compound interest   Interest that is calculated by adding the interest earned in the current period to the principal and figuring the next period's interest on this "compounded" total amount.
• compounding method   Used in Bank rate tables. These include: S--Simple interest. A--Compounded annually. H--Compounded semi-annually. Q--Compounded quarterly. M--Compounded monthly. D--Compounded daily.
• interest-crediting methods   A number of methods used to establish how interest is accrued, owed and dispersed to the parties due.
• simple interest (SI)   Interest computed only on the principal balance, without compounding.
• simple interest loan   A method of allocating the monthly payment between interest and principal. The interest charged is determined by the unpaid principal balance on the loan, the interest rate, and the number of days since the last payment. The rest of the payment goes to the principal. Making early payments or additional payments reduces the loan's principal and cuts the total interest paid over the life of the loan.