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You memorize a list of paired associates including "RUBBER-BAND." Later someone asks you what word on the list refers to a group that plays music, and you do not think of the word BAND. Why not?
Present Value
The current worth of a future sum of money or stream of cash flows given a specified rate of return, used in discounting and investment appraisal.
Maturity Value
The amount due to be paid at the end of a financial instrument's term, including both the principal and any accrued interest.
Stated Interest Rate
The interest rate specified on a loan or investment agreement, not accounting for compounding or fees.
Prevailing Rate
The current interest rate or wage rate for a particular industry or geographic location.
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