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9 Cards in this Set
- Front
- Back
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Future Value |
The amount an investment is worth after one or more periods |
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Compounding |
The process of accumulating interest on an investment over time to earn more interest |
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Interest on Interest |
Interest earned on the reinvestment of previous interest payments (compounding) |
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Compund Interest |
Interest earned on both the initial principal and the interest reinvested from prior periods |
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Simple Interest |
Interest is earned each period only on the original principal |
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Present Value |
The current value of future cash flows discounted at the appropriate discount rate |
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Discount |
To calculate back the PV of some future amount |
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Discount Rate |
The rate used to calculate the PV of future CF |
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Discounted Cash Flow Valuation (DCF) |
Calculating the present value of a future cash flow to determine its value today |
