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Q4 reviewers > Business Math > Flashcards

Business Math Flashcards

1
Q

the amount a borrower pays for using the money.

A

Interest (I)

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2
Q

the amount of money borrowed or deposited.

A

Principal(P)

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3
Q

the interest paid on one unit (peso) of capital (principal).

A

Rate of interest(r)

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4
Q

the amount of time allotted for repayment of the principal plus the interest. It is a term in years.

A

Time(t)

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5
Q

The principal amount plus the interest. Also called Future Value (FV) or Maturity Value.

A

Amount (A) or Balance

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6
Q

It is an interest that is computed on the principal amount
only.

A

Simple interest

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7
Q

It is an interest computed on the principal
and also on the accumulated
interest

A

Compound Interest

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8
Q

Simple interest formula

A

Is = Prt

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9
Q

Compound Interest formula

A

The amount (A) at the end of the year is equal to the sum of the principal (P) and the interest (Pr) for that year.

Ic = A - P
A = P + Pr = P(1 + r)

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10
Q

Simple interest Maturity Value or (Amount or
Balance) Formula

A

A = P + Is or
A = P + Prt or
A = P(1 + rt)

where:
A = Maturity value/Future value
P = Principal
Is = Simple Interest

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11
Q

Compound Interest Maturity Value or (Amount or
Balance) Formula

A

In general, when interest is compounded annually for n years, the amount (or future value) A is
A = P(1+ r)^t

Ic = A – P
where:
A = Maturity value/Future value
P = Principal
Ic = compound Interest
r = rate of interest, and
t = time or term in years or fraction of a year

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12
Q

Because interest is paid on interest, compound
interest is always _____ than simple interest.

A

greater

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13
Q

“Annual” ; K =?

A

K=1

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14
Q

“Semi-annual” ; k = ?

A

K=2

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15
Q

“Quarterly” ; K = ?

A

K = 4

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16
Q

“Monthly” ; k = ?

A

k = 12

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17
Q

“Daily” ; k = ?

A

k = 365

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18
Q

r/k is called the ____ ____

A

periodic rate

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19
Q

Compounding more than once a year formula

A

𝑨 = 𝑷(𝟏 + 𝒓/𝑲)^Kt

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20
Q

it pertains to the interval
for compounding

A

Period

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21
Q

Is. principal amount formula

A

P = Is/rt
P = F / (1 + rt)

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22
Q

Is. rate formula

A

r = Is/Pt

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23
Q

Is. time formula

A

t = Is/Pr

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24
Q

Ic. principal amount formula

A

𝑷 = 𝑨/ (𝟏 +𝒓/𝑲)^𝑲t

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25
Q

interest based on a 360-day year.

A

Ordinary Interest or Banker’s Interest

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26
Q

interest based on a 365-day year

A

Exact Interest

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27
Q

A 360-day year is favorable for the ______ while a 365-day year is favorable for the _______.

A

lender ; borrower

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28
Q

a sequence of payments made at equal (fixed) intervals or periods of time

A

Annuity

29
Q

the time between successive payments

A

Payment interval

30
Q

time between the first payment interval and last payment
interval

A

Term of an annuity, t

31
Q

the amount of each payment

A

Regular or Periodic payment, R

32
Q

sum of future values of all the payments to
be made during the entire term of the annuity.

A

Amount (Future Value) of an annuity, F

33
Q

sum of present values of all the payments to be
made during the entire term of the annuity

A

Present value of an annuity, P

34
Q

A _______ annuity is an annuity where the payment interval is the SAME as the interest period.

A

simple

35
Q

A ______ annuity is an annuity where the payment interval is NOT the same as the interest period.

A

general

36
Q

Annuity. According to payment interval and interest period

A

Simple Annuity
General Annuity

37
Q

Annuity. According to time of payment

A

Ordinary Annuity/Annuity Immediate
Annuity Due

38
Q

Annuity. According to duration

A

Annuity Certain
Contingent Annuity

39
Q

A type of annuity in which the payments are made at the END of each payment interval

A

Ordinary Annuity/Annuity Immediate

40
Q

A type of annuity in which the payments are made at BEGINNING of each payment interval

A

Annuity Due

41
Q

An annuity in which payments begin and end at DEFINITE TIME

A

Annuity Certain

42
Q

An annuity in which the payments extend over an INDEFINITE (or indeterminate) length of time

A

Contingent Annuity

43
Q

Annuities may be classified according to ______ interval and _______ period.

A

payment ; interest

44
Q

one powerful tool to illustrate or to visualize simple and general annuity.

A

Time diagram for its cash flow

45
Q

Regular Payment is also called as?

A

Periodic payment

46
Q

“per annum” ; K = ?

A

12

47
Q

fair market value is also called as ?

A

economic value

48
Q

a.____________________ is a single amount that is equivalent to the value of the payment stream at that date. This particular date is called a b.______ ______

A

a. fair market value / economic value
b. focal date

49
Q

an annuity that does not begin UNTIL A GIVEN TIME INTERVAL HAS PASSED

A

Deferred Annuity

50
Q

time between the purchase of an annuity and the start of the payments for the deferred annuity.

A

Period of Deferral

51
Q

two types of stocks

A

preferred stock
common stock

52
Q

are certificates that promise to pay a fixed rate of interest by a corporation or government at the end of certain time.

A

Bonds

53
Q

______ or SHARES are units of equity or ownership in a company.

A

Stocks

54
Q

Dividend per Share formula

A

total dividend / total share
Par Value x Dividend Percentage

55
Q

The ______ value is the same as its face value. This is the amount printed on the face of the bond which the borrower promises TO PAY the bond holder on the due date

A

par

56
Q

The ____ value of a bond is the price at which the bond is being SOLD.

A

market

57
Q

market value > par value

A

selling at premium

58
Q

market value < par value

A

selling at discount

59
Q

It is a place where stocks are bought and sold.

A

stock market

60
Q

It is composed of 30 companies that are carefully selected to represent the general movement of the market price.

A

Philippine Stock Exchange Index (PSEi)

61
Q

It is the main platform for bonds and fixed income securities in the
Philippines.

A

Philippine Dealing and Exchange Corporation (PDEx)

62
Q

It is the largest issuer of the Philippine bonds.

A

Philippine Government

63
Q

a sum of money that is borrowed from a lending institution with the promise
to pay back with interest over pre-determined period of time.

A

LOAN

64
Q

types of loan

A

business
consumer

65
Q

is money lent to an individual for personal or family purpose.

A

Consumer Loan

66
Q

Type of Consumer loan. is a contract between a borrower and a lender that allows
someone to borrow money to buy a house, apartment, condo, or other livable
property. A home loan is typically paid back over a term of 10, 15 or 30 years.

A

Home loan

67
Q

Type of Consumer loan. a type of loan with no specific purpose. (Ex: credit card,
educational purposes,etc.)

A

personal loan

68
Q

Type of Consumer loan. also known as an automobile loan, or auto loan) is a
sum of money a consumer borrows in order to purchase a car

A

Car loan

69
Q

money lent specifically for a business purpose. It may be used to
start a business or to have a business expansion.

A

business loan

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