Descriptions A series of equal cash flows that occur at the end of each of the equally spaced intervals (such as daily, monthly, quarterly, and so on) A cash flow stream that is created by a lease that requires the payment to be paid on the first of each month and a lease period of three years A 6% return that you could have earned if you had made a particular investment A series of equal (constant) cash flows (receipts or payments) that are expected to continue forever 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 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? O PMT PMT x (2+0) (0) I O PMT X () O PMT X (1+8) 1

Time value of moner calculations can be solved ving a mathenutical equation, a finaodal calculator, or a spreadsheet. Which of the following einatlans can be used to solve for the present value of an erdinary annuity? MMT(11sin21)PMT(1(a+)201)PMT(ann)1(1+r))