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MIS Chapter 6
Vocabulary and Functions
Question | Answer |
---|---|
The interest that is calculated without including any previously earned/owed interest. | Simple Interest |
The interest that is calculated by including any previously earned/owed interest. | Compound Interest |
The value of a loan or investment. | Principal |
A schedule detailing the payments of a financial transaction and the remaining principal in each period. | Amortization Schedule/Table |
The money flow into and out of a financial entity. | Cash Flow |
The function that calculates the periodic interest rate of a financial transaction. | RATE Function |
The function that calculates the duration of a financial transaction as expressed by the number of equal periods. | NPER Function |
The function that calculated the periodic payment of a financial transaction. This payment is assumed to be paid in equal periodic installments. | PMT Function |
The function that calculates the initial value of a financial transaction. | PV Function |
The function that calculates the value of the principal portion of a loan payment based on the original loan amount, periodic interest rate, and payment number. | PPMT Function |
The function that calculates the value of the interest portion of a loan payment based on the original loan amount, periodic interest rate and payment number. | IPMT Function |
The function that calculates the internal rate of return at which discounted cash flows in and out are equal. | IRR Function |
The function that calculates the accumulated value of the interest portion of the period payments of a financial transaction between two specified periods. | CUMIPMT Function |
The function that calculates the accumulated value of the principal portion of the period payments of a financial transaction between two specified periods. | CUMPRINC Funtion |
The function that evaluates the hurdle rate and the series of cash flow values and automatically calculates the discounted value. | NPV Function |
The function that calculates depreciation using the straight line method. | SNL Function |
The number of periods (years) it will take to pay back an original investment. | Payback Period |
The ratio of profits to initial investment. | Return on Investment (ROI) |