The Time Value of Money Can Be Applied to All

question 47

Multiple Choice

The time value of money can be applied to all of the following, except

• A) bond valuation.
• B) stock valuation.
• C) determining the current market value of your home.
• D) determining the amount of taxes owed on income this year.

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Definitions:

Annual Rate

the interest rate for a whole year, rather than just a shorter period.

Accrued Interest

The interest on a loan or bond that has accumulated since the principal investment, or since the last interest payment, if there has been one.

Daily Balance

A method of calculating interest where the amount owed or due is recalculated each day, based on the balance of the account at the end of each day.

Borrowed

Refers to money or goods taken on loan with the obligation to return it or pay it back, usually with interest, within a specified period.