Equity is the value of an asset (e.g house, car) minus any debts attached to that asset.
For a property, the equity would be the current market value of the property minus the balance of any loans attached to that property.
As an example, say we have a property as follows:
and
The equity in this property would be $400,000. That is $1,000,000 – $600,000 = $400,000
Inflation is an increase in the level of prices of the goods and services that households buy. It is measured as the rate of change of those prices. Typically, prices rise over time, but prices can also fall (a situation called deflation).
Monetary policy involves using interest rates to influence aggregate demand, employment and inflation in the economy. It is one of the main economic policies used to stabilise business cycles. The Reserve Bank is responsible for monetary policy in Australia ..
Compound Interest is the addition of interest to the principal sum of a loan – basically meaning that you pay interest on interest. Compound interest is standard practice when taking out a home loan.
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