1
FRL 300 Common Exam Topics
Coverage: Chapter 5678910
Chapter 5: Time Value of Money
1.
Define and compute simple vs. compound Interest
2.
Future value and compounding
Compute the future (compound) value of a lump sum investment
3.
Present value and discounting:
Compute the present value of a lump sum investment
4.
Compute the interest rate (rate of return) that is implied by the value change
5.
Compute the number of periods required to attain a desired amount of money
from a fixed investment amount
Chapter 6: MultiPeriod Cash Flows and Discounted Cash Flow Analysis
1.
Compute the future value of multiple cash flows
2.
Compute the present value of multiple cash flows
3.
Define annuity (and annuity due) and perpetuity
An ordinary annuity versus an annuity due
A perpetuity as a special case of an annuity
4.
Calculate annuity and perpetuity values
Calculate present value and future values for ordinary annuity
Calculate the present value of a level perpetuity
Solve for the implied interest rates in a series of annuity cash flows
Solve for an annuity payment
Solve for the number of payments required to payoff a loan
5.
The concepts of the effective annual rate (EAR) and the annual percentage rate
(APR)
Calculate the APR given the EAR
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 Spring '11
 Hoffman
 Time Value Of Money, Net Present Value, Internal rate of return

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