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Related Flashcards
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Cards In This Set
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A level stream of cash flows over a certain period of time is defined as what?
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Annuity
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An annuity in which the cash flows continue forever is defined as what?
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Perpetuity
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The interest rate charged per period multiplied by the number of periods per year is defined as what?
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Annual percentage rate
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When do payments for an annuity due occur?
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At the beginning of each period
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The interest rate expressed as if it were compounded once per year is defined as what?
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Effective annual rate
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When comparing savings accounts, what kind of rate should the selected account have?
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Highest effective annual rate
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The interest rate expressed in terms of the interest payment made each period is defined as what?
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Stated or quoted interest rate
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What should be used to compare both investment and loan options?
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Effective annual rate
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