#### Study sets matching "value money"

#### Study sets matching "value money"

trolley

cashier

till

checkout

cart where you put goods you buy at a supermarket

person who works at a bank or shop receiving the money you pay

a drawer, box, or the like, as in a shop or bank, in which mo…

where you line un and pay for your purchase at the supermarket

trolley

cart where you put goods you buy at a supermarket

cashier

person who works at a bank or shop receiving the money you pay

inflation

disinflation

reflation

hyperinflation

A general and progressive increase in prices

a reduction in the rate of inflation

restoration of economic activity, consumer prices, etc., to h…

inflation that is out of control

inflation

A general and progressive increase in prices

disinflation

a reduction in the rate of inflation

bank

cash

compound Interest

compounding

a financial institution that provides various products and se…

money in the form of paper currency or coins (as distinct fro…

earning interest on interest through reinvesting. The result…

the process of leaving an initial investment plus accumulated…

bank

a financial institution that provides various products and se…

cash

money in the form of paper currency or coins (as distinct fro…

Present Value formula?

Future value: find n when interest is…

Future value: find i when compounded?

Ordinary annuity

PV=FV/(1+r)^n

n=number of compounding periods... ex: an amount over 5 years t…

i=yearly interest per period... ex: i=6% for amount that compou…

Series of equal payment to be received at the end of the period

Present Value formula?

PV=FV/(1+r)^n

Future value: find n when interest is…

n=number of compounding periods... ex: an amount over 5 years t…

bargain

credit

debt

fortune

something you buy that costs much less than normal

the ability of a customer to obtain goods or services before…

an obligation to pay or do something

a very large amount of money

bargain

something you buy that costs much less than normal

credit

the ability of a customer to obtain goods or services before…

Present Value

Future Value

Interest Rate

Symbol for Time

earlier money on a time line ... -Cash Outflow ... PV

later money on a time line ... Cash inflow ... FV

exchange rate between earlier money and later money ... I/Y

N

Present Value

earlier money on a time line ... -Cash Outflow ... PV

Future Value

later money on a time line ... Cash inflow ... FV

Time value of money

Discount

Interest rate

Opportunity cost

As a topic in investment mathematics deals with equivalence r…

Cut the value of a payment based on how much time passes befo…

A rate of return that reflects the relationship between diffe…

The value that investors forego by choosing a particular cour…

Time value of money

As a topic in investment mathematics deals with equivalence r…

Discount

Cut the value of a payment based on how much time passes befo…

Future Value

compounding

interest on interest

compound interest

The amount an investment is worth after one or more periods.

The process of accumulating interest in an investment over ti…

Interest earned on the reinvestment of previous interest paym…

Interest earned on both the initial principal and the interes…

Future Value

The amount an investment is worth after one or more periods.

compounding

The process of accumulating interest in an investment over ti…

Amortized Loan

Annuity

Compound annuity

Compounding

a loan paid off in equal installments composed of both princi…

a series of equal payments; these payments are made at the en…

an investment that involves depositing the same amount of mon…

the number of periods during the year where interest is calcu…

Amortized Loan

a loan paid off in equal installments composed of both princi…

Annuity

a series of equal payments; these payments are made at the en…

Future value of money

Simple Interest

Compound Interest

Principal

the amount of money to which an investment (or debt) will gro…

interest earned only on the original money (principal) that y…

interest earned on the original (principal) investment or amo…

The amount of money you invest or borrow

Future value of money

the amount of money to which an investment (or debt) will gro…

Simple Interest

interest earned only on the original money (principal) that y…

Time Value of Money

Theory of Equivalence diagram

Theory of Equivalence

P, F, A, n, i

money can be invested at certain interest rate... money can be…

Monies collected at different times can be compared... For eval…

P - Present Value... F - Future Value... A - Periodic Payment n - N…

Time Value of Money

money can be invested at certain interest rate... money can be…

Theory of Equivalence diagram

Principal

Fixed Interest Rate

Risk

Inflation

The original amount of money invested or saved.

The rate will not change for the lifetime of the investment.

The uncertainty of the outcome of an investment.

The steady rise in the general level of prices.

Principal

The original amount of money invested or saved.

Fixed Interest Rate

The rate will not change for the lifetime of the investment.

Time value of money

Interest Rate

Risk

Inflation

States that a dollar has a greater value at the present time…

Amount of money that will be paid to an investor for allowing…

The amount of uncertainty in the investment and its future gr…

The rise of the price of goods and services in our economy.

Time value of money

States that a dollar has a greater value at the present time…

Interest Rate

Amount of money that will be paid to an investor for allowing…

Present value (PV)

Future value (FV)

Cash flows

Time value of money

Moving money backward in time to calculate a value today

Moving money forward in time to calculate a value at a specif…

A series of cash payments received or paid out

Money today is worth more than the same money in the future

Present value (PV)

Moving money backward in time to calculate a value today

Future value (FV)

Moving money forward in time to calculate a value at a specif…

Rational decision

Self-interest

Net Benefit

Marginal Benefit

benefits the decision maker as much as possible

an individual makes decisions for his or her own benefit

benefits (measured in dollars) minus the cost of the choice

the additional benefit of doing something one more time

Rational decision

benefits the decision maker as much as possible

Self-interest

an individual makes decisions for his or her own benefit

Principal

Compound Interest

Economics

Time Value of Money

Finance. a capital sum, as distinguished from interest or pro…

interest paid on both the principal and on accrued interest.

(used with a singular verb) the science that deals with the p…

what the money is worth at that time

Principal

Finance. a capital sum, as distinguished from interest or pro…

Compound Interest

interest paid on both the principal and on accrued interest.

Time value of money

Rule of 72

Annual Percentage Rate (APR)

Usury laws

Money is worth more today than the same amount of money in th…

Tool that helps you figure out how long it will take to doubl…

The true cost of credit that must disclosed on the loan agree…

Laws against charging unfair interest rates for loans

Time value of money

Money is worth more today than the same amount of money in th…

Rule of 72

Tool that helps you figure out how long it will take to doubl…

bank

cash

compound Interest

compounding

a financial institution that provides various products and se…

money in the form of paper currency or coins (as distinct fro…

earning interest on interest through reinvesting. The result…

the process of leaving an initial investment plus accumulated…

bank

a financial institution that provides various products and se…

cash

money in the form of paper currency or coins (as distinct fro…

What is an Interest Rate?

real risk-free rate

inflation premium

default risk

1) The price of money or required rate of return... 2) An opport…

delaying consumption

the loss of purchasing power

the risk of getting stiffed

What is an Interest Rate?

1) The price of money or required rate of return... 2) An opport…

real risk-free rate

delaying consumption

future value

The only feasible purpose of financial…

The objective of wealth maximization t…

Financial management mainly focuses on

the amount of money in the future that an amount of money tod…

Wealth Maximization

Amount of returns expected... Timing of anticipated returns... Risk…

All elements of acquiring and using means of financial resour…

future value

the amount of money in the future that an amount of money tod…

The only feasible purpose of financial…

Wealth Maximization

Time Value of Money

Compounding

Discounting

Perpetuity

The idea that it is only possible to compare cash flows occur…

The process of moving cash forward in time over more than one…

The process of moving cash backwards in time. When interest r…

A stream of cash flows that is received over equal, periodic…

Time Value of Money

The idea that it is only possible to compare cash flows occur…

Compounding

The process of moving cash forward in time over more than one…

Time Value of Money

simple interest

compound interest

future value

the interest causes the value of money received today to be g…

interest that you earn on the initial investment only ... simple…

interest you earn on the initial investment and on the previo…

how much an amount today will grow to be in the future

Time Value of Money

the interest causes the value of money received today to be g…

simple interest

interest that you earn on the initial investment only ... simple…

今天香蕉怎卖？... 今天香蕉斤二元九十九毛。

今天西瓜怎么卖？... 今天西瓜一个五块半。

今天橘子一斤多少钱？... 今天橘子一斤三元三毛。

这菠萝一个多少钱？... 一个一元九毛。

What is the price for the bananas today? ... Today they are $2.9…

How much is the watermelon today?... Today the watermelon is $5.…

How much is the peach per pond today?... Today the peach is $3.3…

How much is this pineapple?... The pineapple is $1.90.

今天香蕉怎卖？... 今天香蕉斤二元九十九毛。

What is the price for the bananas today? ... Today they are $2.9…

今天西瓜怎么卖？... 今天西瓜一个五块半。

How much is the watermelon today?... Today the watermelon is $5.…

Future Value of a Lump Sum

Present Value of a Lump Sum

Future Value of an Ordinary Annuity

Future Value of an Annuity Due

= present value X FV factor i,n... We know the value of some amo…

= future value X PV factor i,n... We know the value of some amou…

= payment X FV annuity factor i,n... We want to know the value o…

= payment X FV annuity factor i,n X (1 + i)... We want to know t…

Future Value of a Lump Sum

= present value X FV factor i,n... We know the value of some amo…

Present Value of a Lump Sum

= future value X PV factor i,n... We know the value of some amou…

time value of money

present value

Notes

Leases

relationship between time and money

being able to compare today's dollar and tomorrows dollar on…

valuing noncurrent receivables and payables that carry no sta…

assets and obligations to be capitalized under long-term leas…

time value of money

relationship between time and money

present value

being able to compare today's dollar and tomorrows dollar on…

Simple Interest

Compound Interest

Four Time Value Money Cases

Future Value (lump sum) =

P x R x T

Earns interest on both principal invested as well as all prev…

1. Future Value of a lump sum... 2. Present Value of a lump sum…

Present Value x Future Value Factor(i,n)

Simple Interest

P x R x T

Compound Interest

Earns interest on both principal invested as well as all prev…

Future Value of a Lump Sum

Future value Lump Sum Equation

FV Lumpsum Factor w/o table

Present Value of a Lump Sum

We want to know the value of some amount today and we want to…

FV = PV * FV factor

(1 + i)^n

We know the value of some amount in the future and we want to…

Future Value of a Lump Sum

We want to know the value of some amount today and we want to…

Future value Lump Sum Equation

FV = PV * FV factor

Future Value

Compound Interest

Principal

Present Value

The value at a given future date of an amount placed on depos…

Interest that is earned on a given deposit and has become par…

Amount of money on which interest is paid

The current dollar value of a future amount. The amount of mo…

Future Value

The value at a given future date of an amount placed on depos…

Compound Interest

Interest that is earned on a given deposit and has become par…

To discount

Interest rate can be

How interest rate being composed

Real risk free interest rate

To cut it value based on how much time passes before the mone…

1. Rate of return... 2. Discount rate... 3. Opportunity cost

R=real risk-free interest rate + inflation premium+ defailt r…

Single-period interest rate if no inflation were expected... =ti…

To discount

To cut it value based on how much time passes before the mone…

Interest rate can be

1. Rate of return... 2. Discount rate... 3. Opportunity cost

time value of money

compounded interest

necessary adjustments to i and n

future value of a lump sum

compounded interest

earns interest on both principal invested as well as all prev…

i % number of compounds per year... n * number of compounds per…

pv * future value factor (i, n)

time value of money

compounded interest

compounded interest

earns interest on both principal invested as well as all prev…

Interest Rate

Simple Interest

Compounded Interest

Accumulation Function

Interest rate is the amount charged, expressed as a percentag…

=P*(1+i)(n)

=P*(1+i)^n

The amount an investment currently holds. ... Interest accumulat…

Interest Rate

Interest rate is the amount charged, expressed as a percentag…

Simple Interest

=P*(1+i)(n)

The purpose of this topic is to develo…

Time value is associated with money

Dollar now or later?

the value that you would accept today

Serves as a basis for almost all other topics covered in this…

= the value of a particular sum of money changes as time passes

now ensure receipt (risk)... higher value (inflation)... could use…

present value

The purpose of this topic is to develo…

Serves as a basis for almost all other topics covered in this…

Time value is associated with money

= the value of a particular sum of money changes as time passes

Time Value of Money =

Compound Interest

Simple Interest

Future Value of a Lump Sum

Compund Interest

Earns interest on the original principal AND previously earne…

Principle x Rate x Time... * interest earned is based on the ori…

We know the value of some amount today and we want to know wh…

Time Value of Money =

Compund Interest

Compound Interest

Earns interest on the original principal AND previously earne…

Lump Sum

greater

Increases.... Because there are more com…

Lower. ... More return. Less invested

a single cash flow at one point in time.

The greater the risk, the ____ the return

As N increases, the future value ____... Why?

The greater the rate, the ____ the present value

Lump Sum

a single cash flow at one point in time.

greater

The greater the risk, the ____ the return