Copyright © 2008, The McGraw-Hill Companies, Inc.657
Index
A
Abbreviated Day of the Year Table, 34
Accidental death and dismemberment benefit,
554, 557
Accounts payable/receivable, 500
Acid test, 511–512
Actuaries, 527, 553
Add-on interest, 450
Adjustable-rate loans, 437
Adjustable-rate mortgage (ARM), 435
Adjusted (or modified) community rating, 541
After-tax benefits, 585
Alternative minimum tax (AMT), 389
American-style option, 280n
Amortization
consolidations and refinancing, 186–188
extra payments, 186
key points, 183–184
remaining balance of loan, 185–186
Amortization tables, 181–188
setting up table, 182–183
spreadsheets for, 228–233
Annual fee, 425
Annual percentage rate (APR), 119, 426
Annual percentage yield (APY), 119
Annualized yield, 119
Annuity, 319–320; see also Future value of
annuity; Nonannual annuities; Present value
of annuity
annuity due, 143
defined, 141–143
examples of, 141–142
extra payments, 197
future values of, 142–143, 146–157
irregular payments, 196–199
missing payment, 197–198
multiple missing/extra payments, 198–199
ordinary annuity, 143
present values of, 142–143, 168–177
spreadsheets for, 235–241
timing of payments, 143
uses and terminology, 141–143
whose payments stop, 192–195
Annuity due, 143
future value of, 155–156
present value of, 169
Annuity factor approach, 148, 156
annuity factor tables, 149–150, 169–170
calculators/computers for, 150, 170
future value annuity factor, 151
present value annuity factor, 168, 170–171
Appeal (tax grievance), 399
Appraisal, 442
Appreciation, 362–363
Approximation, 109
Approximation formula, 453–454
Arithmetic mean, 297
Ask price, 282
Asked (selling) rate, 478
Assessed value, 398–400
Asset(s), 499
Asset allocation, 293–294
Asset allocation funds, 296Asset classes, 292–293
At-cost valuation, 592
Auction, 58
Average(s), 616; see also Measures of average
Average collection days, 510–511
Average cost method, 593–594
Average daily balance (ADB) method, 420–421
calculation of, 422–423
Average inventory, 510–511B
Balance principle, 21–22
Balance sheets, 498–504
balance sheet ratios, 511–512
basic balance sheets, 499–500
horizontal analysis of, 501–504
valuation and, 501
vertical analysis of, 501–504
Balanced funds, 296
Bank, 9
Bankers’ rule, 16
Bar charts/graphs, 610–612
Base plus commission, 584
Being upside down, 435
Beneficiaries, 549
Benefits, 523; see also Employee benefits
Bid price, 282
Biweekly pay, 581
Blended rate, 542
Blue chips, 293
Board of directors, 251
Bond(s), 263–269
bond tables, 264–265
current yield, 264–265
prices-yield relationship, 267
sinking funds and, 269
terminology of, 263–264
types of, 268
yield to maturity, 265–266
Bond funds, 296
Bond market, 266–268
Book value per share, 513
Borrowing, 419
Bucket approach, 147–148, 196–197
Business income taxes, 393
Business statistics
charts and graphs, 608–613
measures of average, 616–623
measures of variation, 626–631
Business structures, 251
Buyer’s premium, 343
Buying vs. leasing decision, 458, 462C
Cafeteria plans, 546, 586–587
Calculators, 23–24
Call, 280
Callable bond, 263
Cap(s), 436
Capital gains, 255–256, 389
for inventory, 598Capital gains taxes, 598
Capital loss, 257
Carrying charge, 449
Cash, 293
Cash discounts, 355–357
Cash flow statements, 504
Cash settlement, 278
Cash settlement contracts, 278
Cash value, 553
Cell, 208
Central tendency, measures of, 617
Certificates of deposit (CDs), 9, 71n
Charts and graphs, 609–613
bar charts, 610–612
line graphs, 612–613
pie charts, 609–610
Chebyshev’s Theorem, 629
Chicago Board Options Exchange (CBOE), 282
Chicago Board of Trade, 276
Chicago Mercantile Exchange, 276
Chronological approach, 147, 192–195
Circle charts/graphs, 609
Claim, 523
Claims adjuster, 523
Cliff vesting, 310
Close a position, 279
Closed-end funds, 295
Closing costs, 442
Coinsurance, 530–532, 538
Collateral, 419
Column, 209
Column charts, 610
Commissions, 425, 581, 584
Commodities, 274–275
hedging with futures, 275–276
percentage return, 279
Commodities market, 276
Common stock, 251
Community rating, 541
Comparative index, 621
Compound annual growth rate (CAGR) formula, 256
Compound growth, 121–122
Compound interest, 86–90
annual compounding, 94, 131–132
basics of, 86–90
calculation of, 93–94
concept of, 87–88
formula for, 90–92
future value and, 93
nonstandard terms, 108–110
order of operations, 92–93
present value and, 94
Rule of 72, 94–97
solving for rates and times, 131–133
spreadsheets for, 215–217
Compound interest formula, 92
continuous compounding, 106, 108
nonannual compounding, 102–104, 132
Compounding frequencies, 101–110
annual compounding, 94, 131–132
comparing frequencies, 104–106
continuous compounding, 106–108, 131–132
future value and, 156–157
nonannual compounding, 102–104bie24825_index.indd 657bie24825_index.indd 657 5/24/07 4:32:19 PM5/24/07 4:32:19 PM