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What are you finding when computing compound interest?

Future Value

What are you finding when computing discount interest?

Present value

What does the stock market need to look better?

Lower intrest rates

If rates go down how what happens?

Present value rises

What happens if rates rise?

Prices go down

Annuity

Constant fixed cash flow

Ordinary Annuity

Payment occured at the end of each period

What consist of Annual Percentage Rate (APR)?

• Loan Amortization

• Interest Payment

What consist of Effective Annual Rate (EAR)?

• Principal Payments

Ideally, when should you borrow for a morgage?

Low rates

When should you borrow for investing?

High rates

How do you recognize loan amortization?

• House morgage

• Auto loan

What does a loan amortization table require:

• Year

• Beggining Balance

• Payments

• Interest

• Principal

• Ending Balance

What’s the first thing to do to calculate the nominal rate?

Hit 2nd →ICONV

Perpetuity

Payments of a propetuity constitutes in infinite/series

Bond

A debt contract/interest

When calculating a bond, what is required?

• Par value ($1,000)

• Coupon rate

• Coupon Payment

• Maturity date

• Yeild-to-maturity

• Future vaule (most time $1,000)

Government Bond

• US Government

• US Treasury

• T-bills

• Treasury Bond

• Treasury Notes

Manicipal Bond

• Sate and low government

• Tax insentives