The PV of an annuity formula is: C x{}, where the term in parentheses is sometimes called____________________ and abbreviated ______________.

The FV of an annuity formula is: FV = C x{}, where the term in parentheses is sometimes called____________________.

A perpetuity is a an annuity with the ________ stream of cashflows continues _________. The PV of a perpetuity formula is: PV =. The formula can also be solved for C, and written as: C =. It can also be solved for r: r =.

The interest rate expressed in terms of the interest paymentmade each period is called ainterestrate or ainterest rate. When interest rate is compounded more thanonce a year, the actual interest rate isthan the quoted interest rate. The actual interest rate iscalled. The aforementioned actual interest rate can be computed asfollows: [1 +( )] -1 , where m is the number oftimes per year interest is compounded. When interest is compoundedm times per year, the future value equals.

The three basic types of loans are pure loans, interest-onlyloans, and amortized loans. A pure discount loan is a loan withwhich the borrower receives money today and repays a ______________at some time in the future. The second type of loan repayment plan,called interest-only loans, calls for the borrower to pay____________ each period and to repay the entire _____________ atsome point in the future. An amortized loan requires that theborrower to repay parts of the loan amount over time; i.e. theborrower make periodic payment which include both __________ andrepayment of a portion of the ___________. Notice that the interestpaid in this case (grows /declines) each period, becausethe loan balance is going down.