Other Unfamilliar Terms Flashcards
Maturity Value/Future Value (F)
Final amount that you must pay (INTEREST AND PRINCIPAL)
Maturity Date
the loan is the deadline agreed by both parties wherein the debtor must pay the maturity value of the money she/he lend
Ordinary Interest
calculated on the basis of a 360 day or a 30 day month
Exact Interest
calculated on a 365-day year
Exact time
actual number of dates between two given dates
Approximate Time
each month is considered to have 30 days
Compounded Annually
method of calculating and adding interest to an investment or loan once a year, rather than for another period
Compounding Period
intervals of time between 2 consecutive interest calculation
Immediate Annuity
guaranteed income stream
Variable Annuity
can increase or decrease
Fixed Annuity
annuity holder receives a guaranteed rate of return
Fixed index Annuity
a portion of the premium’s interest rate is tied to a published stock market index.
Deferred Annuity
annutiy payments are delayed. not beginning nor end
Secondary Market Annuity
trade of future income payments for a lump sump payment
Period of Deferral
time between the purchase of an annuity and the start of the payments for deferred annuity
Cash Value
equal to the sum of down payment and the present value of all the installment payments are made
Cash flow
the movement of money in and out of a company, refers to payments received
Nominal Rate
annual rate of interest, denoted by i^m
total number of conversion periods
n=mt
Continuous Compunding
process of compounding periods increase without bond
frequency of conversion
number of conversion periods in one year, denoted by m
Rate (j)
interest rate per period
interest of each conversion period
General Ordinary Annuity
the periodic payment is made at the end of the payment interval
Payment Amount (PMT)
regular amount paid or received in each period
Payment Period (m)
Time interval between each payment such as monthly, quarterly, annually
Term of the annuity (n)
total duration of number of periods over which the payments are made
Interest rate (i)
the periodic interest rate applied to the annuity, often expressed per payment method
Present Value (PV)
the value of the annuity’s payments at 5e beginning of the term accounting for the interest rate, represents the current worth of all future payments
