Term Answer Discounting A. Time value of money B. Amortized loan Ordinary annuity D. Annual percentage rate E. Description A cash flow stream that is generated by a share of preferred stock that is expected to pay dividends every quarter indefinitely. A series of equal cash flows that occur at the end of each of the equally spaced intervals (such as daily, monthly, quarterly, and so on). C. 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 rate that represents the return on an investor's best available alternative investment of equal risk. A schedule or table that reports the amount of principal and the amount of interest that make up each payment made to repay a loan by the end of its regular term. A type of security that is frequently used in mortgages and requires that the loan payment contain both interest and loan principal. An interest rate that reflects the return required by a lender and paid by a borrower, expressed as a percentage of the principal borrowed. H. A concept that maintains that the owner of a cash flow will value it differently, depending on when it occurs. 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. Annuity due F. Perpetuity G. Future value Amortization schedule I. Opportunity cost of funds J. Time value of money calculations 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 future value of an ordinary annuity? PMT x {1 - [1/(1 + r)"]}/ PMT x {[(1 + r)" - 13/r) x (1 + r) PMT x {[(1 + r)" - 1]/r} FV/(1 + r)