33 Questions
Two annual rates with different conversion period that will earn the same maturity value for the same time/term.
Equivalent Rate
Rate when compounded annually will give the same compound each year with the nominal rate; denoted by 1^i
Effective Rate
Annual interest rate
Nominal Rate
Payments by installment are done periodically and in equal amounts
Annuity
the time between successive payments
payment interval
sequence of payments made at equal/fixed intervals or periods of time
annuity
annuity where the payment interval is the same as the interest periods
simple annuity
annuity where the payment interval is not the same as the interest period
general annuity
type of annuity in which the payments are made at the end of each payment interval; also known as "Annuity Immediate"
ordinary annuity
annuity in which payments begin and end at definite times
annuity certain
type of annuity in which the payments are made at the beginning of each payment intervals
annuity due
annuity in which the payments are extend over an indefinite lenght of time
contingent annuity
time between the first payment interval and last payment interval
term of annuity
amount of each payment
regular
sum of the future value of all the payments to be made during the entire term of annuity
future value of an annuity
sum of the present values of all the payments to be made during the entire term of annuity
present value of an annuity
refers to the time between successive period of annuity
payment period
the size of each annuity payment
periodic payment
annuity that does not begin until a given time interval has passed
deferred annuity
time between the purchase of an annuity and the start of the payment for the deferred annuity
period of referral
invests money or make funds available
Lender
owes the money or avail funds from the lender
borrower
date in which the money is received by the borrower
origin date
date on which the money borrowed is to be completely repaid
maturity date
amount of time in years the money is borrowed or invested, length of time between the origin and maturity
time
amount of money borrowed or invested on the origin date
principal
annual rate, usually in percent, charged by the lender
rate
amount paid or earned for the use of money
interest
interest that is computed on the principal and then added to it
simple interest
interest is computed on the principal and also on the accumulated past interest
compound interest
amount after t years that the lender receives from the borrower on the maturity date
maturity value
time between successive conversions of interest
conversion or interest period
number of conversion periods in one year
frequency of conversion
includes interest up to annuities
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