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ESAS > ECON > Flashcards

ECON Flashcards

1
Q

interest calculated based only on the principal or original amount loaned or saved

A

simple interest

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2
Q

interest that uses banker’s year

A

ordinary simple interest

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3
Q

interest that uses the exact number of days

A

exact simple interest

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4
Q

what is called the interest on top of interest?

A

compound interest

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5
Q

the mathematical expression (1+i)^n is referred to as

A

compound amount factor

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6
Q

what is the factor name for the formula (1+i)^-n?

A

single payment present worth

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7
Q

SPCAF means

A

single payment compound amount factor

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8
Q

SPPWF means

A

single payment present worth factor

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9
Q

what is the annual interest rate?

A

nominal rate of interest

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10
Q

what is the actual rate of interest?

A

ERI

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11
Q

ERI means?

A

effective rate of interest

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12
Q

if m = 1, ERI = i = r. true or false?

A

true

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13
Q

the decline of purchasing power of a given currency over time

A

inflation

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14
Q

type of interest where the compounding period is infinite

A

continuous compounding

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15
Q

in continuous compounding, ERI = i if i is compounding ________.

A

annually

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16
Q

interest deducted in advance

A

discount

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17
Q

A uniform series of payment occurring at equal interval of time is called ______.

A

annuity

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18
Q

(P/A, i%, n)

A

uniform series present worth factor

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19
Q

(F/A, i%, n)

A

uniform series compound amount factor

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20
Q

(A/P, i%, n)

A

capital recovery factor

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21
Q

(A/F, i%, n)

A

sinking fund factor

22
Q

payments are made at the end of each period

A

ordinary annuity

23
Q

What is the type of annuity where the first payment does not begin until some later date in the cash flow?

A

deferred annuity

24
Q

series of increasing or decreasing payment by a constant amount at equal periods of time

A

arithmetic gradient

25
Q

(P/G, i%, n)

A

uniform gradient present worth factor

26
Q

(F/G, i%, n)

A

uniform gradient compound amount factor

27
Q

(A/G, i%, n)

A

uniform gradient uniform series factor

28
Q

What is defined as the reduction or fall of the value of an asset due to constant use and passage of time?

A

depreciation

29
Q

In what method of computing depreciation where it assumes that the loss in value is directly proportional to the age of the equipment or asset?

A

straight line method

30
Q

In what method of computing depreciation where it assumes that a sinking fund is established in which funds will accumulate for replacement purposes?

A

sinking fund method

31
Q

In what method of computing depreciation where it assumes that the annual cost of depreciation is a fixed percentage of the book value at the beginning of the year?

A

declining balance method

32
Q

is also called the constant percentage method or the Matheson Formula

A

declining balance method

33
Q

a method of depreciation that has a rate of depreciation twice of the straight line method

A

double declining balance method

34
Q

What is the type of annuity where the payments are made at the beginning of the each period starting from the first period?

A

annuity due

35
Q

What is the type of annuity that does not have a fixed time span but continues indefinitely or forever?

A

perpetuity

36
Q

in perpetuity, m = ∞. true or false?

A

true

37
Q

is the worth of property as shown in the accounting records

A

book value

38
Q

is the worth of property which is equal to the original cost less the amount which has been charged to depreciation

A

book value

39
Q

is the interest earning with equal deposit made at equal interval time

A

sinking fund

40
Q

is a measure of the effectiveness of an investment of a capital

A

ROR

41
Q

ROR means

A

rate of return

42
Q

the total income equals the total operating cost

A

break-even-no-gain-no-loss

43
Q

a secondary book of accounts, the information of which is obtained from the journal

A

ledger

44
Q

refers to the extinction of the debt by any satisfactory set of payments

A

amortization of debt

45
Q

cost of one thing in terms of the alternative given up is called

A

opportunity cost

46
Q

refers to the cumulative effect of elapsed time on the money value of an event, based on the earning power of equivalent invested funds capital should or will earn

A

Time value of money

47
Q

The difference between the present and future worth of money at some time in the future is called ______.

A

Inflation

48
Q

refers to the amount of money paid for the use of borrowed capital

A

Interest

49
Q

refers to the ratio of the interest payment to the principal for a given unit of time and usually expressed as a percentage of the principal

A

Interest rate

50
Q

series of increasing or decreasing payment by a constant percentage at equal periods of time

A

geometric gradient

ESAS (2 decks)

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