Podcast
Questions and Answers
What is the definition of a bond?
What is the definition of a bond?
Which of the following statements best describes a tautology?
Which of the following statements best describes a tautology?
What is a fallacy in propositional logic?
What is a fallacy in propositional logic?
Which type of proposition combines simpler propositions using logical connectors?
Which type of proposition combines simpler propositions using logical connectors?
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In the context of Simple Interest, what does the principal indicate?
In the context of Simple Interest, what does the principal indicate?
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What is the principal amount in the context of borrowing or investing?
What is the principal amount in the context of borrowing or investing?
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How is simple interest calculated?
How is simple interest calculated?
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What does the maturity value represent?
What does the maturity value represent?
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What does an annuity consist of?
What does an annuity consist of?
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What is the period of deferral in a deferred annuity?
What is the period of deferral in a deferred annuity?
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Which of the following best describes compound interest?
Which of the following best describes compound interest?
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What is a stockholder?
What is a stockholder?
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What does the term 'cash flow' refer to?
What does the term 'cash flow' refer to?
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Study Notes
Simple Interest
- Calculated by multiplying interest rate, principal, and time
- Principal: Amount borrowed or invested initially
- Rate: Percentage charged by lender or investment increase
- Interest: Amount paid or earned for using money
- Maturity Value/Future Value: Principal + accumulated interest over time
- Time/Term: Years, days, or months of loan/investment
- Ordinary Time/Banker's Rule: Assumes each month has 30 days (360 days per year)
- Exact Time/Actual Time: Uses exact number of days (365 days per year)
Compound Interest
- Interest calculated on principal and accumulated past interest
- Annuity: Series of equal payments at fixed intervals
- Payment Interval: Time between payments
- Term of Annuity: Time between first and last payments
- Regular/Periodic Payment (R): Amount of each payment
- Future Value (F): Sum of all future values of payments
- Present Value (P): Sum of all present values of payments
Present Value and Future Value of an Annuity
- Future Value: Sum of future values of all annuity payments
- Present Value: Sum of present values of all annuity payments
- Deferred Annuity: Annuity payments begin after an initial delay
- Period of Deferral: Time between purchase and annuity start
- Stock: Part ownership in a company
- Stockholder: Owner of company stock
- Dividend: Company profit distributed to shareholders
- Bonds: Loans made to organizations (like governments)
- Bondholder: Owner of bonds
- Par Value/Face Value: Amount borrowed for bonds
- Proposition: Declarative statement (true or false)
- Compound Proposition: Proposition created by logical connectors
- Conditional Statement: Hypothesis followed by a conclusion (if-then)
- Tautology: A compound statement always true
- Fallacy: A compound statement always false
- Contingency: Compound proposition with both true and false values
Savings
- Simple Interest
- Finding Time in Simple Interest
- Finding Principal in Compound Interest
- General Annuity
- Rate per Conversion Period
- Conversion Period/Frequency
- Deferred Annuity
- Dividend per Share
- Proportional Logic Table/Truth Table
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Description
This quiz covers the essential concepts of simple and compound interest, including the calculations for principal, interest rates, and annuities. Understand how to determine both the future value and present value of investments. Test your knowledge on the differences between ordinary and exact time calculations as well.
