tick marks designate ___ of periods
end
beginning
middle
zero
time 0 is the ''starting'' point ( beginning of period 1) time 1 is the ''end'' of period 1 (the beginning of period 2) ; and so on
finding future values (moving to the __ along the time line) is called ___
left
right
top
down
compounding
3 primary methods to find FVs
solve the fv equation using a regular (non-financial) calculator
use a financial calculator, that is one with financial functions
use a computer with a spreadsheet program such as excel, lotus 1-2-3, or quattro pro
finding present values (moving to the ___ along the time line) is called ___
left, discounting
right, discounting
left, expenses
right, expenses
Where did the discount rate come from?
discount rate is the ''opportunity cost rate''
it does not depend on the source of the investment funds
rate could be earned on alternative investments of ''similar risk''
a perpetuity is an annuity that lasts _____
a short period of time
a long period of time
forever
1 day
an annuity is a series of ''___ payments'' at fixed intervals for a specified number of period
discounted
undiscounted
equal
same
risky
symbol ''PMT'' represents annuity __
payments
cash
transaction
2 types of annuity: 1) ordinary annuity - occurs at the ______ of each period 2) annuity due - payments are made at the ___ of each period
beginning, end
end, beginning
