Basic concepts Finance, or financial management, requires the knowledge and precise use of the language of the field. Match the terms relating to the basic terminology and concepts of the time value of money on the left with the descriptions of the terms on the right. Read each description carefully and type the letter of the description in the Answer column next to the correct term. These are not necessarily complete definitions, but there is only one possible answer for each term. Term Answer Description Discounting A. The name given to the amount to which a cash flow, or a series of cash flows, will grow over a given period of time when compounded at a given rate of interest. Time value of money B. A process that involves calculating the current value of a future cash flow or series of cash flows based on a certain interest rate. Amortized loan C. A rate that represents the return on an investor's best available alternative investment of equal risk. Ordinary annuity D. A value 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. Annual percentage rate E. A cash flow 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. Annuity due F. 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