Quant 1: Rates, Returns and the Time Value of Money
55m | Oct 28, 2026A new arc starts here: Quantitative Methods for the CFA® Level 1 exam, taught by ear. No formula read-aloud, just the intuition, small round numbers, and a clear note on where the calculator does the work. In a two host format, one host explains the material while the other plays a fictional exam candidate.
This episode covers the foundation the rest of the arc builds on. What an interest rate is made of: the real risk-free rate plus premiums for inflation, default risk, liquidity and maturity. How to measure a return honestly, including the income, and why returns across several periods are multiplied rather than added. Why a stated annual rate and an effective annual rate are not the same number. And the time value of money: present and future value, ordinary annuities versus annuities due, a level loan payment, and why a perpetuity's value sits one period before its first payment.
Every section names its trap, and two exam-style practice questions at the end show how the traps turn into wrong answer choices. It closes with four calculator habits: opposite signs for money in and money out, cleared registers, timing words read first, and the rate matched to the number of periods.
All people, companies and banks in the examples are fictional, and the examples are simplified for exam practice.
Free practice exam, 90 questions (free account): tottenprep.com
Totten Prep is independent educational content for exam preparation only. It is not investment advice, and nothing in it guarantees any exam result or score. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute. Totten Prep is not affiliated with, endorsed by, or sponsored by CFA Institute.
