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Listed below are several terms and phrases associated with concepts discussed in the chapter. Pair each item from List A (by letter) with the
Listed below are several terms and phrases associated with concepts discussed in the chapter. Pair each item from List A (by letter) with the item from List B that is most appropriately associated with it. 1. Interest List A 2. Monetary asset. 3. Compound interest 4. Simple interest 5. Annuity List B a. First cash flow occurs one period after agreement begins b. The rate at which money will actually grow during a year c. First cash flow occurs on the first day of the agreement d. The amount of money that a dollar will grow to e. Amount of money paid/received in excess of amount borrowed/lent 6. Present value of a single amount f. Obligation to pay a sum of cash, the amount of which is fixed g. Money can be invested today and grow to a larger amount 7. Annuity due 8. Future value of a single amount h. No fixed dollar amount attached 9. Ordinary annuity 10. Effective rate or yield 11. Nonmonetary asset 12. Time value of money 13. Monetary liability Computed by multiplying an invested amount by the interest rate Interest calculated on invested amount plus accumulated interest k. A series of equal-sized cash flows 1. Amount of money required today that is equivalent to a given future amount m. Claim to receive a fixed amount of money
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