What is the formula to find the present value of a non annuity?
pv = (fv)(factor)
What is the formula to find the present value of an annuity?
pv ann = (payment)(factor)
What is the formula to find the future value of an annuity?
fv annuity = (payment)(factor)
What is the formula to find the future value of a non annuity?
fv = (pv)(factor)
want to know the value of FUTURE assets TODAY
use present value
want to know the value of present day assets AT A FUTURE DATE
use future value
What is the formula to calculate dollar interest amount for a note payable?
$ interest =
ex: interest = $1000 x .08 x 30/360
what are the required 3 characteristics of a liability?
1. a past transaction or event
2. a present obligation
3. a future payment of assets or services
Examples of known liabilities
accounts payable, notes payable, sales taxes payable, unearned revenues
What are the 3 major categories of liabilities?
Ch9 Quiz Prep