Across
- 3. The current value of a future payment or sum of money, calculated by discounting the future amount at a specific rate.
- 8. The cost of passing up the earning potential of a dollar today; it is the fundamental reason money has a time value.
- 10. A linear representation used by financial analysts to identify the timing and amount of cash inflows and outflows.
- 12. The interest rate used to bring future cash flows back to the present; it represents the rate of return available on an investment of equal risk.
- 13. The mathematical term [1/(1+r)^n] used to multiply a future value to find its present value.
Down
- 1. The mathematical term (1+r)^n used to multiply a present value to find its future value.
- 2. The key on a financial calculator used to initiate the solving process for an unknown variable.
- 4. Abbreviation for "Time Value of Money," the concept that the value of a dollar changes over time due to interest and opportunity costs.
- 5. The situation in which interest is earned on both the initial principal and the interest earned in prior periods.
- 6. The amount an investment will grow to over a specific period when compounded at a given interest rate.
- 7. Interest earned only on the initial investment (principal) and not on any previously earned interest.
- 9. The variable representing the dollar amount of each annuity or equal payment in a series of cash flows.
- 11. The Excel function variable representing the total number of periods in a TVM calculation.
- 14. A series of equal payments deposited or received at fixed intervals.