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Match each of the time value of money terms with the definition that best fits The amount to which a cash flow or series of
Match each of the time value of money terms with the definition that best fits The amount to which a cash flow or series of cash flows will grow over a A. Present Value given period of time when compounded at a given interest rate. B. Discounting The value today of a future cash flow or series of cash flows. C. Future Value The arithmetic process of determining the final value of a cash flow or D. Opportunity Cost series of cash flows when compound interest is applied. E. Annuity The rate of return you could earn on an alternative investment of similar risk E Compounding The process of finding the present value of a cash flow or a series of cash flows A series of equal payments at fixed intervals for a specified number of periods. QUESTION 3 Exploring Compound Interest vs Simple Interest (See Section 5-2b Concept Clip). Remember your can click on the Blue vocabulary words in your Cengage Textbook to see their defintion. Which of the following describe Simple Interest? O Occurs when interest is not earned on prior periods' interest and instead interest is only based on the initial principal amount O Occurs when interest is earned on prior periods' interest The arithmetic process of determining the final value of a cash flow or series of cash flows when compound interest is applied. O The process of finding the present value of a cash flow or a series of cash flows
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