| A | B |
|---|
| interest | cost of money |
| annuity | series of equal payments |
| simple interest | principal x rate x time |
| present value | what an amount is worth now |
| future value | value of investment at the end of n periods |
| annuity due | payment is shifted one period earlier |
| compounding | interest earning interest |
| time value of money | opportunity cost |
| amortization | paying off a loan in equal periodic payments |
| annual percentage yield | true rate of return |
| perpetuity | annuity that continues forever |
| ordinary annuity | cash flows occur at the end of the period |
