History Bookmarks Window Help corses… com Term Answer A A series of equal cash f

ID: 368074 • Letter: H

Question

History Bookmarks Window Help corses… com Term Answer A A series of equal cash flows that occur at the end of each of the equalily spaced intervals (such as daily, monthly, quarterly, and so on) A rate that represents the return on an alternative investment of equal risk A schedule or table that reports the amount of principal and the amount of interest that make up each payment made to repay a loan by the end of its regular term A type of security that is frequently used in mortgages and requires that the loan payment contain both interest and loan principal Time value of money investbr's best available B. Amortized loan C. Ordinary annuity D. Annual percentage E. Avalue that represents the interest paid by borrowers or earned by lenders, expressed as a percentage of the amount borrowed or invested over a 12-month period rate Annuity due F. Acash now stream that is created by a lease that requires the payment to be paid on the first of each month and a lease period of three years The concept that states that the timing of the receipt or payment of a cash flow will affect its value to the holder of the cash flow A cash flow stream that is generated by a share of preferred stock that is expected to pay dividends every quarter indefinitely Perpetuity G. Future value H. Amortization schedule LAprocess that involves calculating the current value of a future cash flow or series of cash flows based on a certain interest rate One of the four major time value or money terms the amount to which an individual cash flow or series of cash payments or receipts will grow over a period of time when earning interest at a given rate of interest Opportunity cost of funds

Explanation / Answer

Term

Answer

Description

Discounting

Discounting is used to calculate current value of expected future cash flows at some discounting rate

Time value of money

Time value of money concept used in finance to that how the values of money changes with time.

Amortized Loan

An amortized loan consists of both principal and interest payment of loan at some periodic interval.

Ordinary annuity

Ordinary annuity is the equal amount of payment with periodic interval for some specific time.

Annual percentage rate

Annual percentage rate is actual yearly cost of the loan for its time period.

Annuity due

Annuity due is like ordinary annuity but the amount is due at the starting of the period.

Perpetuity

Perpetuity is the equal amount of payment with periodic interval for indefinite time.

Future value

Future value of fund or series of funds are calculated by compounding it with effective interest rate

Amortization schedule

Amortization schedule is a table which shows the amount of periodic loan payments by separately showing principal and interest amount till the end of loan term.

Opportunity cost of funds

Opportunity cost of funds is the foregone cost which a company can select in best available options.