The Difference Between the Present and Future Value of an Amount

question 10

Multiple Choice

The difference between the present and future value of an amount is

• A)income
• B)interest
• C)annuity
• D)premium

---

Definitions:

Present Value

The current value of a future amount of money or stream of cash flows, given a specified rate of return.

Serial Bonds

Bonds issued under a single series, where each bond matures at a different specified time.

Mature

To reach a stage in development or growth where full potential or desired outcomes have been achieved.

Periodic Interest

Interest that is calculated and applied at regular intervals over the life of a loan or investment, affecting the overall amount paid or received.