Create simple examples to illustrate the following concepts. i. Time value of money ii. Effective interest iii. Sinking Fund iv. Amortized loan
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Create simple examples to illustrate the following concepts.
i. Time value of money
ii. Effective interest
iii. Sinking Fund
iv. Amortized loan
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Solved in 2 steps
- Estimating liquidity needs involves:A. forecasting the level of future loan commitments and depositsB. establishing a liquidity budgetC. forecasting interest rate levelsD. a and cThe yield on a savings account is also referred to as Select one: of O A. liquidity. O B. compounding. zion O C. rate of return. O D. asset management. O E. insolvency.A ‘surplus unit’ is also known as a: Select one: a. debtors b. demander of funds c. lender d. borrower
- What do you understand by the present value of money? Group of answer choices A. Amount borrowed or deposited B. Maximum that can be deposited C. Sum of deposit and interest D. Another name for the futureWhat is the loan cash flow?CREATE AN EXAMPLE PROBLEM WITH CASHFLOW a.) nominal compound interest b.) continuous compound interest
- Which of the following methods consider the time value of money? A. payback and accounting rate of return B. payback and internal rate of return C. internal rate of return and accounting rate of return D. internal rate of return and net present valueDescribe the essential differences between the following cash flow streams: Annuity versus perpetuity Annuity due versus ordinary annuity Illustrate with an example each.Define cost of borrowing.