Module 8 Flashcards
1
Q
Use of
abbreviations
in math
equations.
A
formula notation
2
Q
The notion that a dollar today is worth more than a dollar tomorrow.
A
time value of money
3
Q
An illustration that shows financial events that happen at intervals.
A
timeline
4
Q
A sum of money carried forward over one or more time periods with interest.
A
future value FV
5
Q
An initial
deposit.
A
principal amount
6
Q
Incoming and
outgoing cash.
A
cashflow CF
7
Q
The percentage amount of the principal on deposit, paid as earnings.
A
interest rate
8
Q
An interval
over which
interest is
accumulated.
A
time period
9
Q
A type of interest when only the principal amount is considered.
A
simple interest
10
Q
“Interest on
interest”.
A
compound interest
11
Q
A factor from a financial table used to calculate the future value of a single cash flow over one or more periods.
A
future value interest factor FVIF
12
Q
A financial table setting out interest rate factors by corresponding time periods to calculate what a principal amount will be at a future point.
A
future value table
13
Q
The length of
time for interest
to compound.
A
investment horizon
14
Q
The period of
time over
which interest
is calculated.
A
interest conversion period/ compounding period
15
Q
The contracted or
posted interest rate
for a financial
instrument.
A
nominal insterest rate
