Exam 2: Time Value of Money

What is compounding?

Which example indicates discounting?

What is paper money backed by?

Anna is going to deposit $500 into an account that has an annual interest rate of 8% compounded quarterly.How much will she have at the end of one year?

What do you call a stream of equal payments received or paid at equal intervals in time?

The APY earned on $10,000 at 12% interest compounded monthly over the course of one year is the same rate as if compounded daily.

What is a lump sum?

Using mathematical formulas,financial tables,or a financial calculator,you can find the

What is (1+ r/n)ⁿ -1?

What two cities are currently producing coins?

You put your $100 in a savings account and earn 12% APR.At the end of one year,you earned $12.00 in interest.This is an example of simple interest.

Which act helped eliminate investor confusion with compounding interest and the related yields?

If you had the choice of choosing $3,000 now or $5,000 in five years,which one would you choose if the APY were 12%?

Paper money is produced by the _________________.

The annual percentage yield indicates:

The government has an unlimited supply of money.

A stream of equal payments that occurs at the end of a period is called

You can use the future value interest factor (FVIF)table to calculate the future amount of a lump sum.

If Amelia deposits $7,000 of her high school graduation gift money into a savings account,how much will she have for graduate school in four years if interest rates are 3%?

What gives paper currency value?