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10 Cards in this Set

  • Front
  • Back
discount rate
rate of return on a riskless investment plus a premium based on the perceived risk that expected benefits will not materialize
compound/present value
the conversion of cash flow over a period of time to a common point in time
compound interest
when the interest for each period is added to the principal and the interest for the next period is computed on the total
a series of equal cash flows that occur at the end of each period over a specified number of periods
annuity due
a series of equal cash flows that occur at the beginning of each period over a specified number of periods
present value of a lump sum
the current value of a future payment
present value of an annuity
the value at the beginning of the term of the annuity that is equivalent to the future cash flows discounted at some rate of interest
sinking fund
a fund into which the debtor makes equal periodic deposits to return the principal
bond usually bears
a $1000 principal or par value, a coupon or contract rate of interest, periodic interest payments, and a time to maturity
special form of annuity whose term begins on a definite date but never matures