The document discusses concepts related to simple interest, compound interest, annuities, and applications of present value calculations. It defines key terms, provides formulas for simple interest, compound interest, future value and present value of regular and immediate annuities, and sinking funds. Examples of using present value concepts in leasing, capital expenditures, and bond valuation are also presented.

1. CPTSuccess Revision Notes – Quantitative Aptitude Chapter 4. Simple and Compound Interest including Annuity – Applications

3. Interest – is the price paid by a borrower for the use of a lender’s money

4. Principal – is the initial value of lending

5. Rate of Interest – the percentage rate at which the interest is charged for a defined length of time for use of principal

6. Accumulated Amount – is the final value of an investment© Revision Notes – Quantitative Aptitude CPTSuccess www.cptsuccess.com

11. Amount paid (received) must be constant over the period of annuity, and

12. Time interval between two consecutive payments (or receipts) must be the same© Revision Notes – Quantitative Aptitude CPTSuccess www.cptsuccess.com

16. Step 2: Multiply the result by 1 + i© Revision Notes – Quantitative Aptitude CPTSuccess www.cptsuccess.com

23. Valuation of BondsA bond is a debt security in which the issuer owes the holder a debt and is obliged to repay the principal and interest. Present value concept helps to decide whether or at what rates bonds should be purchased to achieve a specified rate of return. © Revision Notes – Quantitative Aptitude CPTSuccess www.cptsuccess.com

24. CPTSuccess