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10 Cards in this Set
- Front
- Back
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Future value |
is the amount to which an investment will grow after earning interest. |
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Present value |
is the amount you have to invest today if you want to have a certain amount of cash flow in the future. |
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compounding |
future value is computed using |
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discounting |
present value is computed using |
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present value approach |
when making investment decisions, investors usually adopt the |
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Simple Interest |
the amount of interest is computed only once during the term of the investment or borrowing regardless of whether the term is less than one year, equal to one year, or more than one year. |
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I = Prt |
Formula for interest |
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P = I/Rt |
Formula for Principal |
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R = I/Pt |
Formula for Rate |
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T = I / Pr |
Formula for Time |
