Finance, or financial management, requires the knowledge and precise use of the language of the field. Match the terms relating to the basic terminology and concepts of the time value of money on the left with the descriptions of the terms on the right. 1. Discounting
2. Amortized loan
3. Ordinary annuity
4. Annuity due
5. Annual percentage rate
6. Perpetuity
7. Future value
8. Opportunity cost of funds
9. Time value of money
10. Ammortization svhedule
A. A cash flow stream that ls 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 far 10 years.
B. A 6% return that you could have earned if you had made a particular investment C.
C. A table that reports the results of the d saggregaton of each payment on an amortized loan, such as a mortgage, into its interest and loan .
D. A loan in which the payments include interest as well as loan principal.
E. An interest rate that reflects the return required by a lender and paid by a borrower, expressed as a percentage of the principal borrowed.
F. A series of equal cash flow's that occur at the beginning of each of the equaly spaced intervals (such as daily, monthly, quarterly, and so on).
G. The concept that states that the timing of the receipt or payment of a cash flow will affect its volue to the holder of the cash.
H. A series of equal (constant) cash flows (receipts or payments) that are expected to continue farever.
I. The process of determining the present value of a cash flow or series of cash flows to be received or paid in the future.
J. The name given to the amount to which a cash fow, or a series of cash fows, will graw over a given periad of time when compounded at a givern rate of interest.
Time value of money calaulations can be solved using a mathematical equation, a financial caloulator, ora spreadsheet. Which of the fallowing equations can be used to solve for the future value of an annuity due?
A. PNT x {[(1 + r)n-1] / r)
B. PV * (1 + r)n
C. PNT x {[(1 + r)n-1] / r) * (1 + r)