Finance Ch 4
Card Set Information
Finance Ch 4
Finance Time Value Money
Finance Time Value of Money
The beginning value of an account or investment in a project is ___ value.
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.
The process of finding present values is also called?
The reverse process of discounting is?
A series of payments of constant amount over a specified number of periods is called?
Payments made on an annuity at the end of a period is call a ___ annuity.
Payments of an annuity due at the beginning of a period is called an annuity ___.
The present value of an uneven stream of future payments is the ___ of the PV's of the individual payments.
The quoted interest rate is called ___ while the ___ annual interest rate is needed when compounding is involved.
The ___ ___ is one of the most important tools in time value calculations. It helps visualizing what is happening.
An annuity that goes on forever is called?
___ loans are paid off in equal installments over time.
The breakdown of each loan payment as partly interest and partly principal is called?
The ___ cost rate is the rate of return that could be earned on an alternative investment.
The term for equal cash flows coming in at regular intervals is called?
___ ___ is the term designated for uneven cash flows.
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.
[1 + (I
M = number of compounding periods
The ___ percentage rate is the periodic rate times the number of periods per year.
The value of a business (or any assets or stock) is the ___ value of its expected future cash flows.
The future value of an uneven cash flow stream is also know as its ___ value
If a loan uses ___ compounding, then its nominal rate equals its effective rate.
___ time periods are used when payments occur within periods instead at either the beginning or end.
A ___ ___ is defined as a series of payments that increase at a constant rate.