1. Time-value of money is based on the belief that a dollar that will be received at some future date is worth less than a dollar today. 2. Everything else being equal, the higher the discount rate, the higher the present value. 3. The future value increases with increases in the interest rate or the period of time funds are left on deposit. 4. The present value interest factor for i percent and n periods is the inverse of the future value interest factor for i percent and n periods. 5. If a bank compounds savings accounts quarterly, the nominal rate will exceed the effective annual rate. 6. The term structure is defined as the relationship between interest rates and maturities of similar securities. 7. The real rate of interest is composed of a risk-free rate of interest plus a premium that reflects the riskiness of the security