Financial Applications

Question 1

formula for compound interest

Answer 1

A = P (1 + i)n

Question 2

A

Answer 2

amount (what you end up with)

Question 3

P

Answer 3

principal (what you start with)

Question 4

i

Answer 4

interest rate per compounding period as a decimal

Question 5

n

Answer 5

number of compounding periods or number of interest calculations

Question 6

annually

Answer 6

1

Question 7

semi-annually

Answer 7

2

Question 8

quarterly

Answer 8

4

Question 9

monthly

Answer 9

12

Question 10

semi-monthly

Answer 10

24

Question 11

weekly

Answer 11

52

Question 12

bi-weekly

Answer 12

26

Question 13

daily

Answer 13

365

Question 14

formula for amount annuity

Answer 14

A = R [(1+i)2 -1] / I
R = A x I / (1+i)n -1

Question 15

A

Answer 15

amount time last payment Annuity

Question 16

R

Answer 16

regular payment at the end of each compounding period

Question 17

i

Answer 17

interest rate

Question 18

n

Answer 18

number of payments

Question 19

formula for present value of an ordinary annuity

Answer 19

PV = R[ 1- (1+i)-n] / I
R = PV x I / 1- (1+i)-n

Question 20

PV

Answer 20

present value

Question 21

R

Answer 21

payment made at the end of each compounding period

Question 22

i

Answer 22

interest rate per compounding period