Term Answer Description Discounting A A cash flow stream that is created by an investment or loan that requires its cash flows to take place on the last day of each quarter and requires that it last for 10 years [ B. Time value of money Amortized loan A 6% return that you could have earned if you had made a particular A table that reports the results of the disaggregation of each payment on an amortized loan, such as a mortgage, into its interest and loan C. Ordinary annuity D. A loan in which the payrments include interest as well as loan principal An interest rate that reflects the return required by a lender and paid by a borrower, expressed as a percentage of the principal borrowed A series of equal cash flows that occur at the beginning of each of the equally spaced intervals (such as daily, monthly, quarterly, and so on) 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 series of equal (constant) cash flows (receipts or payments) that are expected to continue forever The process of determining the present value of a cash flow or series of cash flows to be received or paid in the future Annual percentage rate E. Annuity due F. G. Future value H. I. Amortization schedule Opportunity cost of J. The name given to the amount to which a cash flow, or a series of cash funds flows, will grow over a given period of time when compounded at a given rate of interest Time value of money calculations can be solved using a mathematical equation, a financial calculator, or a spreadsheet. Which of the following equations can be used to solve for the future value of an annuity due? PMT {[(1 + r)n-1)/r) O PMT x (1 r)n-1]/rx (1 r) O PMT x (1 1 (1 )r) x (1 + r)