Answer Term Discounting A. Time value of money 8. Amortized loan C. Ordinary annuity D. Annual percentage rate E. Description A series of equal (constant) cash flows (receipts or payments) that are expected to continue forever A series of equal cash flows that occur at the end of each of the equally spaced intervals (such as dally, monthly, quarterly, and so on). A series of equal cash flows that occur at the beginning of each of the equally spaced Intervals (such as daily, monthly, quarterly, and so on). A rate that represents the return on an investor's best available alternative investment of equal risk A table that reports the results of the disaggregation of each payment on an amortized loan, such as a mortgage, Into its interest and loan repayment components. A loan in which the payments indude interest as well as loan principal. A value that represents the interest paid by borrowers or earned by lenders, expressed as a percentage of the amount borrowed or invested over a 12-month period. The concept that states that the timing of the receipt or payment of a cash flow will affect its value to the holder of the cash flow. The name given to the amount to which a cash flow, or a series of cash flows, will grow over a given period of time when compounded at a given rate of interest. A process that involves calculating the current value of a future cash flow or series of cash flows based on a certain interest rate Annuity due F. Perpetuity G Future value H Amortization schedule 1. Opportunity cost of funds 3. Time value of money calculations can be solved using a mathematical equation, a financial calculator, or a spreadsheet. Which of the following equations can be used to solve for the present value of an ordinary annuity? PMT X{1 - [1/(1 + r)"]}/ PMT X {[(1 + r) - 1)/t) X (1+1) PMT x ((1+) - 11/) OPMT/e