MANAGEMENT

BUISENESS MANAGEMENT

FINANCIAL MANAGEMENT

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
The main variables of the TVM equation are
A
present value, future value, time, interest rate, and payment.
B
present value, future value, perpetuity, interest rate, and payment.
C
present value, future value, time, annuity, and interest rate.
D
present value, future value, perpetuity, interest rate, and principal.
Explanation: 

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.

There is 1 question to complete.