Calculator Basics Flashcards
What is amortization?
Repayment of a loan over time which shows both principle and interest payments separately
What is an annuity?
A series of savings deposits that are equal and regular
Payments made at the beginning of each period is called?
Annuity due
What is discounting?
The opposite of inflation
What is the FV of an annuity?
The accumulated value of funds required to meet a need
What is the internal rate of return (IRR)?
The calculation of compound interest over a period of IRREGULAR cash flows
What is the Net Present Value (NPV)?
The difference between the total PV of all cash flows over time and the amount of the initial investment to determine the worth of an investment
What is an ordinary annuity?
Payments made at the end of each month
What is the PV of an annuity?
The amount of money to be invested at the (ordinary/due) of the period
Rule of 72
Divide 72 by either the interest rate or the number of years to determine either the years or interest rate required to double your money
Rule of 72
Divide 72 by either the interest rate or the number of years to determine either the years or interest rate required to double your money
What are serial payments?
Payments that increase each year to keep up with inflation
What are level payments?
Payments that are calculated with an inflated ROR and are level across the length of the loan
