Q2 Examination

Question 1

is a person or institution who owes money or avails of the funds from the lender

Answer 1

borrower or debtor

Question 2

an interest added to the principal at the end of a certain period of time after which the interest is computed on the principal.

Answer 2

Compound interest

Question 3

is the sum between the principal and interest

Answer 3

Final amount or maturity value (future value)

Question 4

is a fee that someone pays in order to borrow money

Answer 4

Interest

Question 5

is the percentage that will be paid for every year after the money is borrowed or loaned.

Answer 5

Rate (n)

Question 6

is a person or institution who invests the money or makes the fund available

Answer 6

lender or creditor

Question 7

is the amount of money borrowed or loaned

Answer 7

Principal (P)

Question 8

is defined as interest in which only the original principal yields interest for the entire term of the loan.

Answer 8

Simple interest

Question 9

is the amount of time the money will be borrowed or loaned that is always expressed in term of years

Answer 9

Time

Question 10

is a series of periodic payments made at a regular interval of time such as the students’ monthly rentals

Answer 10

Annuity

Question 11

is an annuity in which the periodic payments are made at the beginning of each payment period

Answer 11

Annuity due

Question 12

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

Answer 12

Cash value

Question 13

is an annuity in which the first payment is not made at the beginning nor at the end of the first period, but at some later date.

Answer 13

Deferred annuity

Question 14

is the length of time for which there is no payment made in defermed

Answer 14

Deferment period

Question 15

is an annuity where the payment interval is not interest period

Answer 15

General annuity

Question 16

is an annuity in which the periodic payments are made at the end of the same as the each payment period

Answer 16

Ordinary annuity

Question 17

is the amount paid at the end of each payment interval

Answer 17

Periodic payment

Question 18

is an annuity where the payment interval coincides or is the same as the interest period

Answer 18

Simple annuity