Other Unfamilliar Terms

Question 1

Maturity Value/Future Value (F)

Answer 1

Final amount that you must pay (INTEREST AND PRINCIPAL)

Question 2

Maturity Date

Answer 2

the loan is the deadline agreed by both parties wherein the debtor must pay the maturity value of the money she/he lend

Question 3

Ordinary Interest

Answer 3

calculated on the basis of a 360 day or a 30 day month

Question 4

Exact Interest

Answer 4

calculated on a 365-day year

Question 5

Exact time

Answer 5

actual number of dates between two given dates

Question 6

Approximate Time

Answer 6

each month is considered to have 30 days

Question 7

Compounded Annually

Answer 7

method of calculating and adding interest to an investment or loan once a year, rather than for another period

Question 8

Compounding Period

Answer 8

intervals of time between 2 consecutive interest calculation

Question 9

Immediate Annuity

Answer 9

guaranteed income stream

Question 10

Variable Annuity

Answer 10

can increase or decrease

Question 11

Fixed Annuity

Answer 11

annuity holder receives a guaranteed rate of return

Question 12

Fixed index Annuity

Answer 12

a portion of the premium’s interest rate is tied to a published stock market index.

Question 13

Deferred Annuity

Answer 13

annutiy payments are delayed. not beginning nor end

Question 14

Secondary Market Annuity

Answer 14

trade of future income payments for a lump sump payment

Question 15

Period of Deferral

Answer 15

time between the purchase of an annuity and the start of the payments for deferred annuity

Question 16

Cash Value

Answer 16

equal to the sum of down payment and the present value of all the installment payments are made

Question 17

Cash flow

Answer 17

the movement of money in and out of a company, refers to payments received

Question 18

Nominal Rate

Answer 18

annual rate of interest, denoted by i^m

Question 19

total number of conversion periods

Answer 19

n=mt

Question 20

Continuous Compunding

Answer 20

process of compounding periods increase without bond

Question 21

frequency of conversion

Answer 21

number of conversion periods in one year, denoted by m

Question 22

Rate (j)

Answer 22

interest rate per period

interest of each conversion period

Question 23

General Ordinary Annuity

Answer 23

the periodic payment is made at the end of the payment interval

Question 24

Payment Amount (PMT)

Answer 24

regular amount paid or received in each period

Question 25

Payment Period (m)

Answer 25

Time interval between each payment such as monthly, quarterly, annually

Question 26

Term of the annuity (n)

Answer 26

total duration of number of periods over which the payments are made

Question 27

Interest rate (i)

Answer 27

the periodic interest rate applied to the annuity, often expressed per payment method

Question 28

Present Value (PV)

Answer 28

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