MATCH THE FOLLOWING

Term Answer Discounting A. Time value of money B. Amortized loan C. 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 6% return that you could have earned if you had made a particular investment. 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. A series of equal cash flows that occur at the beginning of each of the equally spaced intervals (such as daily, monthly, quarterly, and so on). A concept that maintains that the owner of a cash flow will value it differently, depending on when it occurs. Ordinary annuity D. Annual percentage rate E. Annuity due F. Perpetuity G. Future value H. A cash flow stream that is generated by a share of preferred stock that is expected to pay dividends every quarter indefinitely. A table that reports the results of the disaggregation of each payment on an amortized 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. Amortization schedule I. Opportunity cost of funds J