BST FOR MATH REVIEWER (sEPERATE)
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23 Terms
Future Value (Ordinary Annuity) - FV
Present Value (Ordinary Annuity) - P
Future Value (Annuity Due) - FVAD
Present Value (Annuity Due) - PAD
Simple Annuity
an annuity where the payment interval is the same as the interest period.
General Annuity
an annuity where the payment interval is not the same as the interest compounding period.
General Ordinary Annuity
a general annuity in which the periodic payment is made at the end of the payment interval.
Deferred Annuity
an annuity in which the periodic payment is not made at the beginning nor at the end of each payment interval, but some later date.
Perpetuity
a series of periodic payments which are to run infinitely or forever.
Future Value or Amount of an Annuity (F)
the sum of the future values of all payments to be made during the entire term of the annuity.
Present Value of an Annuity (P)
the sum of the present values of all payments to be made during the entire term of the annuity.
Cash Value or Cash Price
down payment (if there is any) plus present value of the annuity.
Payment Period
the interval of time between payments.
Interest Period
the time between successive conversions of interest.
Frequency of Conversion (m)
the number of conversion periods in one year.
Conversion Period
the time between successive conversions of interest.
Total Number of Conversion Periods (n)
the total number of payment or conversion periods.
Nominal Rate (iₘ)
annual rate of interest or interest rate per year.
Rate (j)
the interest rate for each conversion period.
Cash Flow
the movement of money payments and receipts shown through a time diagram.
Time Diagram
a visual representation showing the timing of payments, interest periods, and future or present values of an annuity.
Present Value of an Ordinary Annuity
the sum of the discounted values of all payments at the beginning of the term.
Amount or Future Value of an Ordinary Annuity
the sum of the accumulated future values of all payments at the end of the term.