• Compounding–Discounting

• The process of moving money forward in time is referred to as

compounding. Moving money backward in time is called discounting.
These processes are shown in Figure.
• Unform
  series compound amount factor: Earning at the end of certain period. One time
investment/deposit. (One time investment – Fixed deposit)

• Uniform series sinking fund factor: Reverse of the above i.e., calculate how much has to be
deposited if certain amount of money is required at the end of some time. Like saving for
education or marriage. (Something like Recurrring Deposit)

• Uniform series Present Worth Factor:. How much Principal to borrow at the beginning by
paying in an instalment of possible repayment.

• Uniform Series Capital recovery Factor: Equated monthly Instalment problem. How much
to repay on an average per instalment.

• Effective interest Rates:

• 1 in superscript denotes 1 year interval, if it is half year the it will be 2 and so forth.