Jeremy Thinks His Business Will Be Successful as Long as He

question 5

True/False

Jeremy thinks his business will be successful as long as he just keeps his customers satisfied. He does NOT need to have a great deal of knowledge about accounting practices.

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Definitions:

Frequency of Compounding

The number of times interest is added to the principal balance of an investment or loan per time period, affecting the total interest earned or paid.

Future Value

The value of a current asset at a specified date in the future based on an assumed rate of growth.

Compounded Annually

A method of calculating interest in which the interest is added to the principal at the end of each year, then new interest is calculated on the total for the next period.

Present Value

The now-value of a prospective sum of money or cash flow sequence, according to a certain rate of return.