Define each of the following terms:

a$.$ PV; I; INT; FVN; PVAN; FVAN; PMT; M; INOM

b$.$ Opportunity cost rate

c$.$ Annuity; lump$-$sum payment; cash flow; uneven cash flow stream

d$.$ Ordinary $($or deferred$)$ annuity; annuity due

e$.$ Perpetuity

f$.$ Outflow; inflow; time line; terminal value

g$.$ Compounding; discounting

h$.$ Annual, semiannual, quarterly, monthly, and daily compounding

i$.$ Effective annual rate $($EAR or EFF$\%)$; nominal $($quoted$)$ interest rate; APR;

periodic rate

j$.$ Amortization schedule; principal versus interest component of a payment; amortized loan

$(4-2)$ What is an opportunity cost rate? How is this rate used in discounted cash flow analysis, and

where is it shown on a time line? Is the opportunity rate a single number that is used to

evaluate all potential investments?

$(4-3)$ An annuity is defined as a series of payments of a fixed amount for a specific number of

periods. Thus, $$100$ a year for $10$ years is an annuity, but $$100$ in Year $1,$ $$200$ in Year $2,$

and $$400$ in Years $3$ through $10$ does not constitute an annuity. However, the entire series

does contain an annuity. Is this statement true or false?

$(4-4)$ If a firm$$s earnings per share grew from $$1$ to $$2$ over a $10-$year period, the total growth would

be $100\%,$ but the annual growth rate would be less than $10\%.$ True or false? Explain.