Mathematics of Investments Midterm Examination

Money paid for the use of money.

• Interest

• Capital

• Future Value

• Present Value

Amount borrowed or deposited.

• Principal

• Future Value

• Interest

• Discount

Formula to express simple interest.

• i=Prt

• I = -PRT

• P=Irt

• i=P/rt

Lending money to someone.

• Investor

• Debtor

• Owner

• Proprietor

Borrowing money from the investor.

• Debtor

• Proprietor

• Investor

• Owner

Interest earned when a loan or

investment is repaid in a lump sum.

• Simple Interest

• Compount Interest

• Discount

• Annuity

The percent of the principal paid as interest

per time period

• Rate

• Discount

• Future Value

• Annuity

The number of days, months or years that

the money is borrowed or invested.

• Time

• Simple Interest

• Annuity

• Rate

The sum of the

principal and interest due.

• Future Value

• Present Value

• Interest

• Principal

Formula to express rate.

• r=i/Pt

• r=t/iP

• r=P/it

• r=r/Pt