In the diagram below, label the x-axis, the y-axis, and the origin.
Definitions:
Present Value
The current worth of a future sum of money or stream of cash flows given a specified rate of return, reflecting the time value of money.
Interest Rate
The cost of borrowing money, often expressed as a percentage of the borrowed amount.
Options
Financial instruments that give the holder the right, but not the obligation, to buy or sell an asset at a predetermined price within a set time period.
Interest
The charge for borrowing money, typically expressed as an annual percentage of the loan amount, or the income earned from lending money.
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