Using Time Value of Money Tables definitions Flashcards
Using Time Value of Money Tables definitions
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Present Value
Current worth of a future sum or series of payments, discounted using a specific interest rate and number of periods. Annuity
Series of equal payments made at regular intervals, such as annual or semiannual bond interest payments. Lump Sum
Single payment made at a specific time, often representing the principal repaid at bond maturity. Present Value Table
Chart listing factors used to quickly determine the present value of future lump sums or annuities. Present Value Factor
Multiplier from a table applied to a future value or payment to calculate its present value. Interest Rate
Percentage used to discount future payments to present value, represented as 'r' in calculations. Number of Periods
Total count of time intervals, such as years or half-years, over which payments or discounting occur. Ordinary Annuity
Annuity where payments are made at the end of each period, commonly used in bond interest calculations. Stated Interest Rate
Rate printed on a bond, used to determine the actual cash interest payments to bondholders. Market Interest Rate
Prevailing rate in the market, used to assess the attractiveness and value of a bond. Semiannual Interest
Interest paid twice a year, requiring adjustments to both the interest rate and number of periods. Future Value
Amount of money to be received or paid at a later date, before discounting to present value. Bond Principal
Face value of a bond repaid as a lump sum at maturity, separate from periodic interest payments. Cash Flow Stream
Sequence of payments, such as interest and principal, associated with financial instruments like bonds. Discounting
Process of determining present value by applying a rate to reduce future sums to their current worth.
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