what is a compound return also called

geometric return

what is the basis point

looking at a return down to its 1/100 of 1%

what is PVIF

a formula that determine the PV of $1 to be received at some time in the future n based on a given interest rate k

PVIF are always what (well most of the time)

less than 1 as long as the discount rates are positive - means that future dollars are usually worth less than the same dollars today

what are discount factors

are the reciprocals of their corresponding compound factors and vise versa (PVIF - 1/CVIF) - the greater the discount rate the greater the CVIF (and FV) and the smaller the PVIF (and PV) and vise versa

definition of annuity

regular payments on an investment that are for the same amount and are paid at the same interval

definition cash flows

the actual cash generated from an investment

definition ordinary annuity

equal payments that are made at the end of each period

PMT

for the regular annuity payment or receipt

What type of annuity is this

Ordinary annuity

What type of annuity is this>?

Annuity due because it offers payments at the BEGINING of each period