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Finance, or financial management, requires the knowledge and precise use of the languagc of the ficld Match the terms relating to the basic terminology and
Finance, or financial management, requires the knowledge and precise use of the languagc of the ficld Match the terms relating to the basic terminology and concepts of the time value of money on the let with the descriptions of the terms on the right. Read each descriptian carefully and type the letter of the desciption 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 Term Answer A. The process of determining the present value of a cash flow or series of cash flows to be reoeived or paid in the future Time value of money Amortized loan B. A series of equal oonstant) cash flows (receipts or payments) that are expected to continue forever 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 C. Ordinary annuity D. The concept that states that the timing of the receipt or payment of a cash fow will affect its value to the holder of the cash flow Annual percentagetble that reports the results of the diseggregation of each payment on rate an amortized loan, such as a mortgage, into its interest and loan repayment components F. 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 Annuity due Perpetuity G. A loan in which the payments include interest as well as loen principal Future volue H. Aseries of equal cash flow s that occur at the beginning of each of the equally spaced intervals (such as daily, monthly, quarterly, and so on) A 6% return that you could have earned if you had made pa cular investment L schedule Opportunity cost of funds An interest rate that reflects the return required by a lender and paid by borrower, expressed as percentage of the principal borrowed Time value of money calculations can be solved using a mathematical equation, a finandal calculator, or a spreadsheet. Which of the following equations can be used to solve for the future value of a lump sum? FV/(1 + r)n
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