Principle of Finance Questions (4-1) Define each of the following terms: PV; I; INT; ; ; ; PMT; M; Opportunity cost rate Annuity; lump-sum payment; cash flow; uneven cash flow stream Ordinary (or deferred) annuity; annuity due Perpetuity; consol Outflow; inflow; time line; terminal value Compounding; discounting Annual, semiannual, quarterly, monthly, and daily compounding Effective […]

## What is the relationship between compounding and discounting?

In your initial response please answer all questions: 1) What is the “time value of money”? Why does it exist? 2) What is the relationship between compounding and discounting? 3) What is an annuity? Provide several examples of annuities. Distinguish between an annuity and perpetuity. I have attached this weeks reading to use for […]