Finance Chapter 5 TVM Tricky Topics
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The discount rate is also called the
rate of return
When the future value formula is used to calculate growth rates, the assumption is that _____ growth rate is achieved each year.
the same
Discount factor/ PVIF(r,t)
1/(i + r)^t
discount rate
FV/ (i + r)^t
Which formula will you enter into a spreadsheet cell to determine how long it will take $40 to grow to $240 at an interest rate of 6.53% compounded annually?
NPER(0.0653,0,−40,240)
the opposite of compounding is
discounting
