ACC 210 Lecture Notes - Lecture 8: Compound Interest, Interest

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Decrease in value of money due to the passage of time (that is, right now is worth more. This is because we could invest the today and it would grow to a larger amount (with than one year from now) invested today at 10% will equal in one year because + ( x 10%) = interest) in one year. Simple interest - interest earned on the initial investment only. Compound interest - interest earned on the initial investment and on previous earned (but. Annuity - series of equal sized amount unpaid) interest. The present value of ,000 to be received one year from today when the interest rate is 10% equals less than ,000. Bonds - debt securities issued by corporations that pay a fixed interest payment to investors semi-annually, and mature at some point in the future.

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