FIN 502 Study Guide - Midterm Guide: Tax Rate, Tax Deferral, Tax Deduction

• School: Ryerson University
• Department: Finance
• Course: FIN 502
• Professor: Laleh Samarbakhsh

Document Summary

Annual percentage rate (nominal rate) ror ignore compounding effect(m x km) Effective annual rate (ear) restated from apr to include compounding (1+km)m -1 / if km is = 7%weekly, pv=-4, n=52, i= 7, fv= ?/ Hurdle rate= the min acceptable rate of return min attractive rate of return. Arithmetic - assumes no compounding is a straight average of all the. Ordinary or deferred annuity = occurs and the end of the period. Annuity due = occurs at the beg of the period. Fvcga = x ((1+k)n (1+g)n ) / (k-g) )) k=ror, g= (inflation) annual increase in x. Pvcga = x (1- (1+g / 1+k)n / (k-g) ) Real interest rate (taking inflation back into a real rate) = (1 + nominal rate / 1 + inflation rate) -1. Nominal interest rate (putting inflation back into real rate) = [(1+ real rate) (1 + inflation rate)] 1.