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5 Cards in this Set
- Front
- Back
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Annuity (or ordinary annuity)
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A series of equal cash flow payments that are received or paid at equal intervals in time.
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Compounding
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The process by which money accumulates interest.
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Future Value interest factor (FVIF)
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A factor multiplied by today's savings to determine how the savings will accumulate over time.
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Discounting
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The process of maintaining present values. You want to know how much money you need to invest now to have the same amount of money in future years.
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Present Value interest factor (PVIF)
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A factor multiplied by a future value to determine the present value of the amount. It is dependent on the interest rate and the number of years the money is invested.
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