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9 Cards in this Set
- Front
- Back
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Interest |
-Cost of borrowing money -Amount you receive from lending money |
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Principal |
-Initial amount of loan or investment |
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Time to maturity |
Remaining life of a debt instrument |
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Simple interest |
(Principal x Rate of interest) x Time |
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Compound interest |
Future value (FV) = PV x (1+r)^n |
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Time value of money |
Dollar today is worth more than the promise of a dollar in the future |
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Present value (definition) |
mathematical concept that compares the value of a dollar today versus the value of that same dollar in the future |
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Present value (formula) |
PV = FV / (1+r)^n |
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Variance |
Measure of how broadly a group of numbers spreads out from its mean average |
