In: Accounting
Match the following terms with the appropriate definition.
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1 points
QUESTION 3
Match the following terms with the appropriate definition.
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Terms | Appropriate definition |
Effective yield or interest rate | The rate at which money will actually grow. |
Monetary liability | Fixed obligation to pay an amount in cash |
Compound interest | Interest accumulates on interest. |
Present Value | Current worth of future cash flows. |
Future value of a single amount | The money to which an amount invested will grow over time. |
3.
Terms | Appropriate definition |
Interest | Rent paid or received for the use of money. |
Monetary asset | Claim to a fixed amount of cash |
Expected cash flow approach | The rate to use is the risk-free rate of interest. |
Present value of a single amount. | Amount of money required today that is equivalent to a given future amount. |
Future value of a single amount | The amount of money that a dollar will grow to |
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