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What is a developmentally appropriate practice (DAP)?
Effective Yield
A measure of the actual rate of return earned on a bond or fixed-income investment, taking into account the effect of compounding interest.
Present Value Factors
Mathematical factors used to calculate the present value of a future amount of money or stream of cash flows given a specified rate of return.
Yield 10%
Represents the annual return on an investment, expressed as a percentage of the investment's cost. Here, the investment is expected to return 10% annually.
Bond Interest Expense
The cost that an issuer of bonds incurs over the bond term as interest payments to bondholders, as dictated by the interest rate of the bond.
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