BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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present value, future value, time, interest rate, and payment.
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present value, future value, perpetuity, interest rate, and payment.
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present value, future value, time, annuity, and interest rate.
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present value, future value, perpetuity, interest rate, and principal.
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Detailed explanation-1: -What are the four basic parts (variables) of the time-value of money equation? The four variables are present value (PV), time as stated as the number of periods (n), interest rate (r), and future value (FV).
Detailed explanation-2: -There are Always Five Variables Every time value of money problem has five variables: Present value (PV), future value (FV), number of periods (N), interest rate (i), and a payment amount (PMT).
Detailed explanation-3: -The most fundamental formula for the time value of money takes into account the following: the future value of money, the present value of money, the interest rate, the number of compounding periods per year, and the number of years.
Detailed explanation-4: -There are four main types of cash flows related to time value of money:Future value of a lump sum, future value of an annuity, present value of a lump sum, and present value of an annuity.