Management and Organizational Studies 2277A/B Chapter Notes - Chapter 2: Annual Percentage Rate, Interest, Opportunity Cost

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2277A/B
• Professor: Barry Hawn

Document Summary

Future value of a single dollar amount: using a formula to determine future value of a single. Dollar amount: compound interest rate formula, r or i = annual interest rate, n = number of compound periods per year, t = time in years. Present value of an annuity: using a formula to determine present value of an annuity. Using the present value annuity table: to generate the annuity due from the ordinary annuity table, multiple the number found by (1+i) Interest rate conversion: nominal interest rates: the stated or quoted rate of interest. Also known as the annual percentage rate (apr: effective interest rate: the actual rate of interest that you earn, or pay, over a period of time. It allows you to compare two interest rates compounded differently because it takes the period of compounding into consideration: m = compounding periods per year.