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22 Cards in this Set
- Front
- Back
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FV = PV + (PV * i * N)
* Interest is not earned on Interest |
Simple Interest Formula
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Time line...
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is an important tool used in time value analysis; it is a graphical representation used to show the timing of cash flows
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Compounding...
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is the arithmetic process of determining the final value of a cash flow or series of cash flows when compound interest is applied
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Discounting...
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is the process of finding the present value of a cash flow or a series of cash flows
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Simple interest...
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occurs when interest is not earned on interest
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Compound interest...
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occurs when interest is earned on prior periods’ interest
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Annuity...
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is a series of equal payments of fixed intervals for a specified number of periods
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Ordinary (deferred) annuity...
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is an annuity whose payments occur at the end of each period
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Annuity due...
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is an annuity whose payments occur at the beginning of each period
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Uneven cash flows...
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is a series of cash flows where the amount varies from one period to the next
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Payment...
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is the term that designates equal cash flows coming at regular intervals
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Cash flow (CFt)...
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is the term that designates a cash flow that’s not part of an annuity
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Annual compounding...
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is the arithmetic process of determining the final value of a cash flow or series of cash flows when interest is added once a year
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Semiannual compounding...
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is the arithmetic process of determining the final value of a cash flow or series of cash flows when interest is added twice a year
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Term Loan
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is a loan with a non-changing periodic payment.
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Equivalent Annuities
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Comparison of unequal cash flows to the equivalent amount of equal payments over the same period of time
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PVa =
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FVn =
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Pv =
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FVa =
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Lump Sum
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A single payment, deposit, etc.
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Amortization Table
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A table that separates a loan into categories of payments, interest, principle, and remaining balance.
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