question archive A In relation to the time value of money, what is interest? a
A In relation to the time value of money, what is interest? a
Subject:FinancePrice: Bought3
A In relation to the time value of money, what is interest?
- a.)
- The cost of not having money today
- b.)
- The total value of an investment
- c.)
- The value of money today
- d.)
- The value of money in the future
B Select the best definition of a perpetuity.
- a.)
- An annuity whose payments can be made at any point during the period
- b.)
- An annuity that makes payments forever
- c.)
- An annuity that makes a payment every day
- d.)
- A single investment that grows forever
C Select the correct phrases to complete the sentence.
To find the future value of multiple cash flows, find the __________ of each cash flow and __________.
- a.)
- future value; add them together
- b.)
- future value; multiply them
- c.)
- present value; add them together
- d.)
- present value; multiply them
D What is the difference between APR and APY?
- a.)
- APY gives you a less accurate understanding of the interest rate of an investment, as compared to APR.
- b.)
- APY includes accrued compounding interest when calculating yield, whereas APR does not.
- c.)
- For the same loan, the APY is typically less than the APR.
- d.)
- APY is a simpler measure of yield than APR.
