Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
18 Cards in this Set
- Front
- Back
Amortized Loans 2 |
A loan paid off in equal installments |
|
Annuity |
A series of equal dollar payments at the end of each period for "x" number of time periods |
|
Power of Compound Interest |
Allowing the interest that you earn on an investment to stay in the investment and to earn interest on the interest you have already earned |
|
Perpetuity |
An annuity where the payments never stop |
|
Rule of 72 Math |
By dividing interest rate into 72, you see how many years it takes to double your money |
|
Rule of 72 Math 3 |
By dividing years into 72, you see what interest rate it takes to double your money |
|
Amortized Loans |
Car loans and mortgage loans are typical annuities in the form of these |
|
Power of Compounding |
Helps you attain financial goals, gives you more money for retirement and provides money for excess of social security and private pensions |
|
Discount Rate |
Interest rate used to bring future dollars back to present dollars |
|
Amortized Loans 3 |
Later loan payments involve larger amounts of principal payment |
|
Time Value of Money |
Method by which one can compare cash flows across time either as what a future cash flow is worth today (present value) or what an investment today will be worth in the future (future value) |
|
Compounding Periods |
Money will grow faster as the number of these periods per year becomes larger |
|
Inflation Period |
The "enemy" of compound interest and makes it very difficult to reach your financial goals |
|
Present Value |
The current value in today's dollars of a future sum of money |
|
Future Value |
The dollar value of an investment at some future point in time |
|
Time Value of Money |
This principal states that a dollar today is worth more than a dollar in the future |
|
Compound Annuity |
Uses the principles of reinvesting and compound interest |
|
Rule of 72 4 |
Using rule of 72 divide years into 72 to see interest rate |