Matching
Match the following terms with the description below.
Premises:
The amount that, if invested today at some compound interest rate for a specified period of time, will equal $1 at the end of that time period.
The amount that $1 becomes at a future date, if invested at a specified annual interest rate and compounded a certain number of times per year over the investment period.
Interest that is based on a principal amount that includes interest from previous time periods.
Interest borrowed only on the amount borrowed.
A series of equal payments made over equal time periods.
The amount of money that accumulates at some future date as a result of making equal payments over equal intervals of time and earning a specified rate of interest over that time period.
The process of adding interest to principal for purposes of interest calculation.
The amount of money that, if invested at some rate of interest today, will generate a set number of equal periodic payments that are made over equal time interval.
Responses:
Present value of an annuity
Simple interest
Future value of an annuity
Compound interest
Present value of the amount of $1
Compounding
Annuity
Future value of the amount of $1
Correct Answer:
Premises:
Responses:
The amount that, if invested today at some compound interest rate for a specified period of time, will equal $1 at the end of that time period.
The amount that $1 becomes at a future date, if invested at a specified annual interest rate and compounded a certain number of times per year over the investment period.
Interest that is based on a principal amount that includes interest from previous time periods.
Interest borrowed only on the amount borrowed.
A series of equal payments made over equal time periods.
The amount of money that accumulates at some future date as a result of making equal payments over equal intervals of time and earning a specified rate of interest over that time period.
The process of adding interest to principal for purposes of interest calculation.
The amount of money that, if invested at some rate of interest today, will generate a set number of equal periodic payments that are made over equal time interval.
Premises:
The amount that, if invested today at some compound interest rate for a specified period of time, will equal $1 at the end of that time period.
The amount that $1 becomes at a future date, if invested at a specified annual interest rate and compounded a certain number of times per year over the investment period.
Interest that is based on a principal amount that includes interest from previous time periods.
Interest borrowed only on the amount borrowed.
A series of equal payments made over equal time periods.
The amount of money that accumulates at some future date as a result of making equal payments over equal intervals of time and earning a specified rate of interest over that time period.
The process of adding interest to principal for purposes of interest calculation.
The amount of money that, if invested at some rate of interest today, will generate a set number of equal periodic payments that are made over equal time interval.
Responses:
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