Module 8 Flashcards
1
Q
Simple Interest Formula
A
Principal * Rate * Time
2
Q
When does money double?
A
Years = 72 / Compound Annual Interest Rate
3
Q
How do we calculate Compound Interest?
A
FV = PV(1+R)^n
4
Q
How much money to invest today?
A
FV * Present Value Factor Rate
5
Q
Present Value (PV) of an Ordinary Annuity (OA)
A
Payment/Withdrawal x (PV Factor of a OA)
6
Q
What is an annuity?
A
A series of identical cash flows
7
Q
What is an Ordinary Annuity?
A
the cash flow occurs at the end of a period
