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Exam (elaborations)

FNAN 300 UL Exam 2 Review – Complete Finance Study Guide & Practice Test (2026)

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FNAN 300 UL Exam 2 Review – Complete Finance Study Guide & Practice Test (2026)

Institution
University Of Louisville
Course
FNAN 300

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FNAN 300 UL Exam 2 Review – Complete Finance Study Guide & Practice Test
(2026)


Annual Percentage Rate - ANS ✔✔also known as the Nominal or Quoted Rate, is required by
Law, and is used

in the Time Value of Money Calculations.



Effective Annual Rate (EAR) - ANS ✔✔the interest rate expressed as if it were compounded once
per year.

Used to compare alternative investments or loans.



Annuity Due - ANS ✔✔payments occur at the "BEG" of the Period. Much less common



Ordinary Annuity - ANS ✔✔payments occur at the "END" of the Period (most common)



Perpetuity Formula - ANS ✔✔P V = Payment / r (periodic Payment divided by periodic interest
rate)



Perpetuity - ANS ✔✔infinite series of equal payments



Annuity - ANS ✔✔finite series of equal Payments that occur at regular intervals



Future Value - ANS ✔✔later money on a time line



Present Value - ANS ✔✔earlier money on a time line



Interest Rate - ANS ✔✔"exchange rate" between earlier money and later money
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