Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

10. Time Value of Money

Time Value of Money Equations

Financial Accounting

10. Time Value of Money

Time Value of Money Equations

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Multiple Choice

Which time value of money function calculates the total principal paid through a specified number of payments?

CUMIPMT

CUMPRINC

PMT

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Verified step by step guidance

Understand the concept of the time value of money, which refers to the idea that money available today is worth more than the same amount in the future due to its earning potential.

Review the functions provided in the problem: CUMIPMT (Cumulative Interest Payment), FV (Future Value), PMT (Payment), and CUMPRINC (Cumulative Principal Payment). Each function serves a specific purpose in financial calculations.

Focus on the CUMPRINC function, which is used to calculate the total principal paid over a specified number of payments in a loan or investment. This function is particularly useful for understanding how much of the loan balance has been reduced over time.

Understand the inputs required for the CUMPRINC function: rate (interest rate per period), nper (total number of payment periods), pv (present value or loan amount), start_period (the starting payment period), end_period (the ending payment period), and type (payment type, either at the beginning or end of the period).

To calculate the total principal paid using CUMPRINC, input the required values into the function and ensure the parameters are correctly aligned with the loan or investment details. This will provide the cumulative principal paid over the specified range of payments.