# Finance Ch 4

 The flashcards below were created by user Anonymous on FreezingBlue Flashcards. The beginning value of an account or investment in a project is ___ value. Present The difference between a savings account's present value and its future value at the end of the period is due to the ___ earned during the period. Interest The process of finding present values is also called? Discounting The reverse process of discounting is? Compounding A series of payments of constant amount over a specified number of periods is called? Annuity Payments made on an annuity at the end of a period is call a ___ annuity. Ordinary Payments of an annuity due at the beginning of a period is called an annuity ___. Due The present value of an uneven stream of future payments is the ___ of the PV's of the individual payments. Sum The quoted interest rate is called ___ while the ___ annual interest rate is needed when compounding is involved. NominalEffective The ___ ___ is one of the most important tools in time value calculations. It helps visualizing what is happening. Time Line An annuity that goes on forever is called? Perpetuity ___ loans are paid off in equal installments over time. Amortized The breakdown of each loan payment as partly interest and partly principal is called? Amortization Schedule The ___ cost rate is the rate of return that could be earned on an alternative investment. Opportunity The term for equal cash flows coming in at regular intervals is called? Payments ___ ___ is the term designated for uneven cash flows. Cash Flow The ___ annual rate is the rate that would have produced the same future value under annual compounding as would more frequent compounding at a given nominal rate. Effective [1 + (Inominal / M)]M - 1 M = number of compounding periods The ___ percentage rate is the periodic rate times the number of periods per year. Annual The value of a business (or any assets or stock) is the ___ value of its expected future cash flows. Present The future value of an uneven cash flow stream is also know as its ___ value Terminal If a loan uses ___ compounding, then its nominal rate equals its effective rate. Annual ___ time periods are used when payments occur within periods instead at either the beginning or end. Fractional A ___ ___ is defined as a series of payments that increase at a constant rate. Growing Annuity AuthorAnonymous ID72269 Card SetFinance Ch 4 DescriptionFinance Time Value of Money Updated2011-03-11T18:38:08Z Show Answers