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9 Cards in this Set
- Front
- Back
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Compound Interest
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When you get interest on the interest - it is called compounded interest - the longer it stays in the account, the longer it compounds - the more we get
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Future Value
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Define
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FV Formula
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FV = PV (1+i)^n (n is the number of periods, i is the interest, PV is present value)
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PV
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the amount we put in at the beginning of the period
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Ordinary Annuity
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same intervals or time period and same amount (depositing $1000 every month). Payments at the end of the period.
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Lump Sum
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based on $1 amount
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Annuity Due
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same intervals or time period and same amount (depositing $1000 every month). Payments at the beginning of the period.
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The present value of a deferred annuity
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In a deferred annuity, the first cash flow is expected to occur more than one period after the date of agreement
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Bond Selling at Par
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Selling at Par is Selling at Face Value of the bond
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