ECON

Question 1

interest calculated based only on the principal or original amount loaned or saved

Answer 1

simple interest

Question 2

interest that uses banker’s year

Answer 2

ordinary simple interest

Question 3

interest that uses the exact number of days

Answer 3

exact simple interest

Question 4

what is called the interest on top of interest?

Answer 4

compound interest

Question 5

the mathematical expression (1+i)^n is referred to as

Answer 5

compound amount factor

Question 6

what is the factor name for the formula (1+i)^-n?

Answer 6

single payment present worth

Question 7

SPCAF means

Answer 7

single payment compound amount factor

Question 8

SPPWF means

Answer 8

single payment present worth factor

Question 9

what is the annual interest rate?

Answer 9

nominal rate of interest

Question 10

what is the actual rate of interest?

Answer 10

ERI

Question 11

ERI means?

Answer 11

effective rate of interest

Question 12

if m = 1, ERI = i = r. true or false?

Answer 12

true

Question 13

the decline of purchasing power of a given currency over time

Answer 13

inflation

Question 14

type of interest where the compounding period is infinite

Answer 14

continuous compounding

Question 15

in continuous compounding, ERI = i if i is compounding ________.

Answer 15

annually

Question 16

interest deducted in advance

Answer 16

discount

Question 17

A uniform series of payment occurring at equal interval of time is called ______.

Answer 17

annuity

Question 18

(P/A, i%, n)

Answer 18

uniform series present worth factor

Question 19

(F/A, i%, n)

Answer 19

uniform series compound amount factor

Question 20

(A/P, i%, n)

Answer 20

capital recovery factor

Question 21

(A/F, i%, n)

Answer 21

sinking fund factor

Question 22

payments are made at the end of each period

Answer 22

ordinary annuity

Question 23

What is the type of annuity where the first payment does not begin until some later date in the cash flow?

Answer 23

deferred annuity

Question 24

series of increasing or decreasing payment by a constant amount at equal periods of time

Answer 24

arithmetic gradient

Question 25

(P/G, i%, n)

Answer 25

uniform gradient present worth factor

Question 26

(F/G, i%, n)

Answer 26

uniform gradient compound amount factor

Question 27

(A/G, i%, n)

Answer 27

uniform gradient uniform series factor

Question 28

What is defined as the reduction or fall of the value of an asset due to constant use and passage of time?

Answer 28

depreciation

Question 29

In what method of computing depreciation where it assumes that the loss in value is directly proportional to the age of the equipment or asset?

Answer 29

straight line method

Question 30

In what method of computing depreciation where it assumes that a sinking fund is established in which funds will accumulate for replacement purposes?

Answer 30

sinking fund method

Question 31

In what method of computing depreciation where it assumes that the annual cost of depreciation is a fixed percentage of the book value at the beginning of the year?

Answer 31

declining balance method

Question 32

is also called the constant percentage method or the Matheson Formula

Answer 32

declining balance method

Question 33

a method of depreciation that has a rate of depreciation twice of the straight line method

Answer 33

double declining balance method

Question 34

What is the type of annuity where the payments are made at the beginning of the each period starting from the first period?

Answer 34

annuity due

Question 35

What is the type of annuity that does not have a fixed time span but continues indefinitely or forever?

Answer 35

perpetuity

Question 36

in perpetuity, m = ∞. true or false?

Answer 36

true

Question 37

is the worth of property as shown in the accounting records

Answer 37

book value

Question 38

is the worth of property which is equal to the original cost less the amount which has been charged to depreciation

Answer 38

book value

Question 39

is the interest earning with equal deposit made at equal interval time

Answer 39

sinking fund

Question 40

is a measure of the effectiveness of an investment of a capital

Answer 40

ROR

Question 41

ROR means

Answer 41

rate of return

Question 42

the total income equals the total operating cost

Answer 42

break-even-no-gain-no-loss

Question 43

a secondary book of accounts, the information of which is obtained from the journal

Answer 43

ledger

Question 44

refers to the extinction of the debt by any satisfactory set of payments

Answer 44

amortization of debt

Question 45

cost of one thing in terms of the alternative given up is called

Answer 45

opportunity cost

Question 46

refers to the cumulative effect of elapsed time on the money value of an event, based on the earning power of equivalent invested funds capital should or will earn

Answer 46

Time value of money

Question 47

The difference between the present and future worth of money at some time in the future is called ______.

Answer 47

Inflation

Question 48

refers to the amount of money paid for the use of borrowed capital

Answer 48

Interest

Question 49

refers to the ratio of the interest payment to the principal for a given unit of time and usually expressed as a percentage of the principal

Answer 49

Interest rate

Question 50

series of increasing or decreasing payment by a constant percentage at equal periods of time

Answer 50

geometric gradient