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18 Cards in this Set
- Front
- Back
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Amortized Loans 2 |
A loan paid off in equal installments |
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Annuity |
A series of equal dollar payments at the end of each period for "x" number of time periods |
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Power of Compound Interest |
Allowing the interest that you earn on an investment to stay in the investment and to earn interest on the interest you have already earned |
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Perpetuity |
An annuity where the payments never stop |
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Rule of 72 Math |
By dividing interest rate into 72, you see how many years it takes to double your money |
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Rule of 72 Math 3 |
By dividing years into 72, you see what interest rate it takes to double your money |
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Amortized Loans |
Car loans and mortgage loans are typical annuities in the form of these |
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Power of Compounding |
Helps you attain financial goals, gives you more money for retirement and provides money for excess of social security and private pensions |
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Discount Rate |
Interest rate used to bring future dollars back to present dollars |
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Amortized Loans 3 |
Later loan payments involve larger amounts of principal payment |
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Time Value of Money |
Method by which one can compare cash flows across time either as what a future cash flow is worth today (present value) or what an investment today will be worth in the future (future value) |
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Compounding Periods |
Money will grow faster as the number of these periods per year becomes larger |
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Inflation Period |
The "enemy" of compound interest and makes it very difficult to reach your financial goals |
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Present Value |
The current value in today's dollars of a future sum of money |
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Future Value |
The dollar value of an investment at some future point in time |
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Time Value of Money |
This principal states that a dollar today is worth more than a dollar in the future |
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Compound Annuity |
Uses the principles of reinvesting and compound interest |
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Rule of 72 4 |
Using rule of 72 divide years into 72 to see interest rate |
