Students often experience problems in solving time-value-of-money problems — primarily because they do not know which interest rate to use from among the nominal, effective, and periodic rates. In this paper we show the relationships among different interest rates and clarify the use of these rates in the time-value-of money problems. In particular, we show how to calculate the periodic rate, given the nominal rate, because students must use the periodic rate when they use either the “formula” or “financial cal culator” method to compute the interest rate.