Finance, or financial management, requires the knowledge and precise use of the language of the field. Match the terms relating to the basic terminology and concepts of the time value of money on the left with the descriptions of the terms on the right: Read each description carefully and type the letter of the description in the Answer column next to the correct term. These are not necessarily complete definitions, but there is only one possible answer for each term Answer Term Discounting Time value of money B Amortized loan C Ordinary annuity D Annual percentage rate E Description 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 The process of determining the present value of a cash flow or series of cash flows to be received or paid in the future. A rate that represents the return on an investor's best available atternative investment of equal risk. An interest rate that reflects the return required by a londer and paid by a borrower, expressed as a percentage of the principal borrowed. A cash flow stream that is created by a fease that requires the payment to be paid on the first of each month and a lease period of three years A concept that maintains that the owner of a cash flow will value it differently, depending on when it occurs A series of equal (constant) cash flows (receipts or payments) that are expected to continue forever A table that reports the results of the disaggregation of each payment on an amortired loan, such as a mortgage, into its interest and loan repayment components A cash flow stream that is created by an investment or loan that requires its cash flows to take place on the last day of each quarter and requires that it last for 10 years A type of security that is frequently used in mortgages and requires that the loan payment contain both interest and loan principal Annuity due F Perpetuity G Future value H Amortization schedule 1 Opportunity cost of funds Time value of money calcutations 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 a perpetuity? - r rr) PMTI FW/(1+1 OP (1)