The Time Value of Money Flashcards
This deck only covers KEY definitions. Read Notion for key concepts, maths, and theories.
1
Q
Define cash flow analysis.
A
A timeline showing the magnitude of cash flows at different points in time.
2
Q
Define an ordinary annuity.
A
A payment which occurs at the end of each period.
3
Q
Define an annuity due.
A
A payment which occurs at the beginning of each period.
4
Q
Define APR.
A
Annual percentage rate is the quoted, or nominal, rate.
5
Q
Define EAR.
A
The effective annual rate is the rate that incorporates compounding.
6
Q
What is an amortising loan?
A
A type of loan where the borrower makes regular payments that are applied to both the interest and principal of the loan.
