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 financial function calculates the total amount of interest paid over a specific number of payments?

PMT

NPER

CUMIPMT

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Verified step by step guidance

Understand the financial function CUMIPMT: It calculates the cumulative interest paid on a loan over a specified range of payments. This is useful for analyzing the total interest paid during a specific period.

Identify the key inputs required for the CUMIPMT function: These typically include the interest rate (rate), the total number of payments (NPER), the loan amount (PV), the start period, and the end period for which the interest is being calculated.

Set up the formula for CUMIPMT: The general structure is CUMIPMT(rate, NPER, PV, start_period, end_period, type), where 'type' specifies whether payments are made at the beginning (1) or end (0) of the period.

Ensure proper interpretation of the inputs: For example, the interest rate should be expressed per period (e.g., monthly if payments are monthly), and the start and end periods should align with the payment schedule.

Apply the formula to calculate the cumulative interest: Substitute the values for rate, NPER, PV, start_period, end_period, and type into the formula to determine the total interest paid over the specified range of payments.