Finance and Math Glossary(105)

Short, plain definitions of the terms used in interest, percentage and inflation calculations, each linked to the calculators that use it.

Absolute Zero: The lowest temperature possible in theory: 0 K, which is −273.15 °C and −459.67 °F. It is the zero point of the kelvin scale; no temperature can be lower.
Activity Factor: The multiplier that turns the basal metabolic rate into the daily energy need. It grows with daily movement; calorie calculations use values from 1.2 (sedentary) to 1.9 (extremely active).
Adequate Intake (AI): The reference value used for a nutrient when an average requirement cannot be set: the average daily intake observed in a group of healthy people and assumed to be adequate (EFSA).
Annual Cost Rate: The total cost of a consumer loan, with interest, taxes and fees, as a yearly percentage of the loan amount. Also called the annual percentage rate (APR); use it to compare loans.
Annual Inflation: The percentage change of the consumer price index (CPI) in a month compared with the same month a year earlier. In Türkiye TÜİK publishes it every month as the official inflation rate.
Basal Metabolic Rate (BMR): The energy the body uses in a day at complete rest to keep vital functions such as breathing, circulation and body temperature going, in kcal per day.
Body Fat Percentage: The share of body weight that is fat: fat mass divided by weight. It can be estimated from tape measurements with the U.S. Navy method.
Body Mass Index (BMI): Weight in kilograms divided by the square of height in metres. The World Health Organization treats 18.5–24.9 as the normal range for adults.
BSMV (Banking and Insurance Transactions Tax): Banka ve Sigorta Muameleleri Vergisi: a Turkish expenditure tax on the money banks receive for their transactions. On consumer loans it is 15% of the interest and is added to the installment.
Business Day: A working day that is not a weekend day or a public holiday. In Türkiye this usually means Monday to Friday.
CAGR (Compound Annual Growth Rate): The constant yearly rate at which an investment would grow from its initial value to its final value: (final value / initial value)^(1/t) − 1.
Calendar Day: A date on the calendar: a full day from midnight to midnight. Weekends and public holidays are calendar days too; a week has 7 calendar days.
Celsius (°C): The everyday temperature scale in most of the world, symbol °C. The SI defines it from the kelvin: a Celsius temperature is the kelvin temperature minus 273.15. A difference of one degree Celsius equals one kelvin.
Compound Interest: Interest that is added to the balance at the end of each period, so the next period's interest is calculated on the larger balance: interest earns interest.
Contractual Interest Rate (Akdi Faiz): The interest rate agreed between the bank and the customer in a loan or credit card contract, before any taxes on the interest. For credit cards, a regulator may set a maximum.
CPI (Consumer Price Index): An index of the price level of a basket of goods and services that households buy. The national statistics office publishes it every month; official inflation is its yearly change.
CPI 12-Month Average Change: The percentage change of the average consumer price index of the last twelve months over the average of the twelve months before. TÜİK publishes it monthly; it is the legal rent increase cap in Türkiye (Code of Obligations art. 344).
Cumulative Tax Base: The sum of an employee's monthly income tax bases from January up to the current month in Turkish payroll. It decides which bracket rate applies to each month's pay.
Daily Energy Need: The energy needed in a day to keep body weight steady: the energy used at rest plus the energy used in daily activity, in kcal per day.
Declared Sale Price: The sale price the parties state at the land registry when a property is sold in Türkiye. The title deed fee is charged on it, and it cannot be below the property tax value (Fees Law 492 art. 63).
Deflation: A fall in the general level of prices of goods and services, when the yearly change of the price index turns negative. With deflation, the same money buys more over time.
Denominator: The number below the fraction bar. It tells how many equal parts the whole is split into: in 3/4 the denominator is 4. It cannot be zero.
Direct Proportion: A relationship in which one quantity grows or shrinks by the same factor as another. The ratio of matching values stays constant.
Early Repayment Fee: A fee a bank may charge when a loan is paid off before its term. It is usually a percentage of the principal paid early, and consumer law may cap it or ban it for some loan types.
Effective annual rate: The yearly rate including the effect of compounding: (1 + r/n)^n − 1.
Effective Tax Rate: The total tax paid as a percent of the taxable income. Under a progressive tariff it is at most the marginal rate. Also called the average tax rate.
Employer Cost: What an employee costs the employer each month: the gross salary plus the employer's own social insurance premiums and payroll charges. It is always higher than the gross salary.
Fahrenheit (°F): The temperature scale used in the United States, symbol °F. It is linked to Celsius by t(°F) = 1.8 × t(°C) + 32, so one Fahrenheit degree is 5/9 of a Celsius degree.
Final Amount: The total you receive at the end of the term: the principal plus the interest earned over the term. On a deposit, the amount after withholding tax is the net final amount.
Foot (ft): A unit of length used in the United States and the United Kingdom, symbol ft. One foot is 12 inches and, since 1959, exactly 0.3048 meters by definition.
Fraction: A number written a/b that shows how many equal parts of a whole you take. The top number a is the numerator, the bottom number b the denominator, which cannot be zero.
Gram (g): A unit of mass, symbol g, equal to one thousandth of the kilogram, the SI base unit of mass. It is used on food labels, in recipes and for small everyday weights.
Greatest Common Divisor: The largest positive whole number that divides two or more whole numbers without a remainder, also called the greatest common factor. The GCD of 84 and 126 is 42.
Gregorian Calendar: The calendar in official use in Türkiye and most of the world. A year has 365 days, a leap year 366; Türkiye adopted it by Law No. 698, from 1 January 1926.
Gross Salary: Pay before any deduction. Social insurance premiums and payroll taxes are taken from the gross salary; what is left is the net salary.
Healthy Weight Range: The range of weights that keeps the body mass index (BMI) between 18.5 and 24.9 for a given height. The World Health Organization treats this BMI range as normal for adults.
Ideal Weight: A body weight estimated from height and sex with the Devine, Robinson, Miller or Hamwi formula. The formulas apply to adults of 152.4 cm (5 ft) or taller.
Inch (in): A unit of length used in the United States and the United Kingdom, symbol in. Since 1959 one inch has been exactly 2.54 centimeters by definition; 12 inches make a foot.
Income Tax: The tax on the earnings and income of individuals in one calendar year: wages, rent, self-employment and business income. Many countries set it with a progressive tariff of brackets and rates.
Inflation: The rise in the general price level of goods and services, which lowers what the same money can buy.
Interest Rate: The interest paid or charged on a principal for a period, as a percentage of that principal. It is usually quoted per year; a monthly or daily rate can be turned into a yearly one.
International System of Units (SI): The shared system of measurement built on seven base units: the meter, kilogram, second, ampere, kelvin, mole and candela. The International Bureau of Weights and Measures (BIPM) publishes it.
Inverse Proportion: A relationship in which one quantity grows by the same factor as the other shrinks. The product of matching values stays constant: if 4 workers need 12 days, 6 workers need 8.
Kelvin (K): The SI base unit of thermodynamic temperature, symbol K. The scale starts at absolute zero, and an interval of one kelvin equals an interval of one degree Celsius.
Kilocalorie (kcal): The energy unit used for food energy and daily energy needs. One kilocalorie is 1,000 calories, or 4.184 kilojoules; the “calorie” of food labels and everyday speech is a kilocalorie.
Kilogram (kg): The SI base unit of mass, symbol kg. Since 2019 it has been defined by fixing the value of the Planck constant. One kilogram is 1,000 grams.
KKDF (Resource Utilization Support Fund): Kaynak Kullanımını Destekleme Fonu: a levy that Turkish banks charge on loan interest and pass to a state fund. On consumer loans it is 15% of the interest and is added to the installment.
Landlord (Kiraya Veren): The party to a lease who lets the tenant use a thing in return for rent; for a home, the owner who rents it out.
Leap Year: A year of 366 days, with 29 days in February. In the Gregorian calendar, years divisible by 4 are leap years, except century years not divisible by 400.
Lease Agreement: A contract in which the landlord lets the tenant use a thing, and the tenant pays the agreed rent in return.
Loan Installment: The amount paid each period to repay a loan. In an equal-installment loan it is the same every month and holds principal, interest and any taxes charged on the interest.
Marginal Tax Rate: The rate of the highest tax bracket the taxable income reaches. It shows the tax on one more unit of income; it does not apply to the whole income.
Maturity (Term): The period between the start of a deposit, loan or debt and the day it is repaid. Interest is calculated for this period; a deposit returns the principal with interest at maturity.
Meter (Metre): The SI base unit of length, symbol m. It is the distance light travels in a vacuum in 1/299,792,458 of a second. British English spells it metre.
Mile: A unit of length used in the United States and the United Kingdom. The international mile is exactly 1,609.344 meters by definition, unlike the nautical mile of 1,852 meters.
Minimum Payment: The least a cardholder must pay on a credit card statement by the due date. It is a share of the statement balance, set by a regulator or the bank. The unpaid rest carries interest.
Minimum Wage: The lowest pay an employer may legally give a worker for a month or an hour of work. The law or a government body sets it, and other payroll limits and exemptions are often tied to it.
Minimum Wage Exemption: The Turkish rule that frees the part of a wage equal to the minimum wage from income tax and stamp duty. It applies to every employee, including those paid above the minimum wage.
Mixed Number: A whole number and a proper fraction written together, such as 3 2/5. An improper fraction becomes a mixed number when you divide the numerator by the denominator.
Nautical Mile (nmi): A unit of length used at sea and in aviation, symbol nmi. The international nautical mile is exactly 1,852 meters, longer than the 1,609.344-meter international mile.
Net Salary: Take-home pay: the gross salary minus the employee's social insurance premiums and payroll taxes. It is the amount that reaches the bank account.
Nominal Interest Rate: The yearly interest rate as quoted, without the effect of compounding or inflation. A monthly rate times 12 gives the nominal annual rate.
Notice Pay (İhbar Tazminatı): The wage of the notice period that the side ending an open-ended employment contract without notice must pay to the other side. It grows with the notice period, which follows the length of service.
Notice Period (İhbar Süresi): The time one side must give the other before ending an open-ended employment contract. It grows with the length of service, and the side that skips it owes notice pay.
Numerator: The number above the fraction bar. It tells how many equal parts of the whole you take: in 3/4 the numerator is 3.
Ounce (oz): A unit of mass used in the United States and the United Kingdom, symbol oz. The avoirdupois ounce is 1/16 of a pound, exactly 28.349523125 grams by definition.
Overtime (Fazla Mesai): Work above the weekly working time that the law or the contract sets. Each overtime hour is paid at a premium above the normal hourly wage; many countries also cap the overtime hours in a year.
Percentage Change: The measure of by what percent a value rose or fell from its old value: (new − old) ÷ old × 100. A positive result is an increase, a negative one a decrease.
Percentage Increase: By what percent a value grew from its old value: divide the increase by the old value and multiply by 100. Going from 80 to 100 is a 25% increase.
Percentage point: The arithmetic difference between two percentages: a rise from 10% to 12% is 2 percentage points.
Perfect Square: A number that is a whole number multiplied by itself, such as 1, 4, 9, 16, 25 or 36. The square root of a perfect square is a whole number; for example, √144 = 12.
Pound (lb): A unit of mass used in the United States and the United Kingdom, symbol lb. Since 1959 the avoirdupois pound has been exactly 0.45359237 kilograms by definition.
Principal: The starting amount that interest is calculated on: the money borrowed in a loan or deposited in a savings account.
Property Tax Value (Emlak Vergisi Değeri): The value of a building or land that Turkish property tax is calculated on. It follows unit values set by valuation commissions and is available from the municipality. The title deed fee base cannot be below it (Fees Law 492 art. 63).
Proportion: An equation stating that two ratios are equal: a / b = c / x. When three terms are known, the fourth is found by cross multiplication.
Purchasing Power: The quantity of goods and services an amount of money can buy. When prices rise, the same money buys less, so inflation lowers purchasing power.
Radical: A number written with a root sign, such as √2 or 6√5. In a√b, a is the coefficient outside the root and b is the radicand; in simplest form, b has no square factor.
Ratio: A comparison of two quantities by division. The ratio of a to b is written a / b or a : b, and b cannot be zero; if 3 pens cost 12, the ratio of price to pens is 4.
Real Estate Commission: The fee a licensed real estate agent charges for arranging a sale or a rental, usually a percentage of the sale price or a share of the rent, often split between the parties.
Real Return: The return on an investment or deposit after inflation is taken out; the change in purchasing power: (1 + nominal return) / (1 + inflation) − 1.
Rent Increase Cap: The highest increase allowed for a residential or commercial lease at renewal, usually tied to the change in a consumer price index over the previous rental year.
Repayment Schedule: A table of every installment of a loan in order: the installment, the principal repaid, the interest, any taxes on the interest, and the principal still owed.
Revolving Fund Fee (Döner Sermaye): The service fee paid to the land registry's revolving fund on title deed transactions in Türkiye, separate from the title deed fee. Its amount depends on the region of the property.
Severance Pay (Kıdem Tazminatı): A lump sum an employer pays a worker whose contract ends for a reason the law or the contract covers. It usually grows with years of service and is based on the last gross wage.
Severance Pay Ceiling: The highest severance pay in Türkiye for one year of service. It equals the highest retirement bonus paid to a top civil servant for one year of service and is updated in January and July.
Simple Interest: Interest calculated on the principal alone for the whole term. The interest is not added to the principal, so it earns no interest itself.
Social Security Earnings Ceiling: The highest monthly earnings that social insurance premiums are charged on. No premium is taken on the part of the pay above it, so the premium stays fixed for higher earners.
Social Security Premium (SGK Primi): The pension, health and short-term insurance contribution charged on an employee's gross pay. Part is withheld from the employee's pay and part is paid by the employer on top of it.
Square Root: The non-negative number whose square is the given number, written with the √ sign. Since 14² = 196, √196 = 14. Negative numbers have no real square root.
Stamp Duty: A tax on documents such as contracts, leases, guarantees, decisions and payslips. It is usually a small share, per mille, of the amount the document shows, often capped per document.
Stone (st): A unit of mass used in the United Kingdom for body weight, symbol st. One stone is 14 pounds, which makes it exactly 6.35029318 kilograms.
Tax Bracket: A range of income in the income tax tariff that is taxed at one rate. Each rate applies only to the part of the taxable income that falls in its range.
Taxable Income: The amount a tax is calculated on: income after exemptions, deductions and expenses. For a salary it is usually the gross pay minus the employee's social insurance contributions.
Tenant (Kiracı): The party to a lease who pays the agreed rent in return for the use of a thing.
Time Deposit: Money deposited at a bank for a fixed term and paid back with interest at the end. Where interest is taxed at source, the bank deducts withholding tax from the gross interest and pays the net.
Time Zone: An area that keeps the same official time, written as an offset from Coordinated Universal Time (UTC). Türkiye has used UTC+3 all year since 2016; its name in the time zone database is Europe/Istanbul.
Title Deed Fee (Tapu Harcı): The fee charged in Türkiye on a property sale at the land registry: 20 per mille of the declared value from the buyer and 20 per mille from the seller, 40 per mille in total (Fees Law 492, tariff 4, item 20/a).
Treasury Premium Discount (Hazine İndirimi): The part of the employer's social security (SGK) premium that the Treasury pays for employers who meet the conditions (Law 5510 art. 81). In 2026 it is 2 points in general and 5 points in manufacturing.
Unemployment Insurance: Compulsory insurance that pays a benefit to insured workers who lose their job through no choice or fault of their own. Its premium is charged on gross pay, usually shared between employee, employer and sometimes the state.
VAT (Value Added Tax): A tax on the supply of goods and services that is added to the price and finally paid by the consumer. It is a percentage of the net price, so it is taken out of a gross price by division, not by multiplication.
VAT-Exclusive Price: The price before value added tax (VAT) is added. VAT is calculated on this amount: VAT = VAT-exclusive price × rate.
VAT-Inclusive Price: The total price with value added tax (VAT) included: the VAT-exclusive price plus the VAT. The VAT inside it is found by dividing the price by (1 + rate).
Weekday: One of the five days from Monday to Friday. ISO 8601 starts the week on Monday and numbers the days from 1 (Monday) to 7 (Sunday); Saturday and Sunday are the weekend.
Withholding Tax (Stopaj): Income tax that the payer deducts from a payment and pays to the tax office on behalf of the recipient. Common on rent, professional fees, wages and deposit interest; the recipient gets the net amount.
Yard (yd): A unit of length used in the United States and the United Kingdom, symbol yd. One yard is 3 feet or 36 inches and, since 1959, exactly 0.9144 meters by definition.