(7.8) A perpetuity is an annuity with the ____________ stream of cash flows continuing _______________. The PV of a perpetuity formula is PV = _________________. The formula can also be solved for C and written as: C = __________________. It can also be solved for r: r = ___________________.

(7.9) The interest rate expressed in terms of the interest payment made each period is called a ______________ interest rate or a ______________ interest rate. When interest rate is compounded more than once a year, the actual interest rate is than the quoted interest rate. The actual interest rate is called the __________________________. The aforementioned interest rate can be computed as follows: {[1 + (_______________)] -1}, where m is the number of times per year interest is compounded. When interest is compounded m times per year, the future value equals (equation) .

(7.10) The three basic types of loans are pure loans, interest-only loans, and amortized loans. A pure discount loan is a loan with which the borrower receives money today and repays a ______________ at some time in the future. The second type of loan repayment plan, called interest-only loans, calls for the borrower to pay ____________ each period and to repay the entire _____________ at some point in the future. An amortized loan requires that the borrower to repay parts of the loan amount over time; i.e. the borrower make periodic payment which include both __________ and repayment of a portion of the ___________. Notice that the interest paid in this case (grows / declines) each period, because the loan balance is going down.