Question: Question #1 How does simple interest compare to compound interest? Which is more desirable to an investor?Why? How does the frequency of compounding affect returns?

Question #1

How does simple interest compare to compound interest? Which is more desirable to an investor?Why? How does the frequency of compounding affect returns? Please provide an example

Question #2

Explain what is meant by the time value of money. Why is it important? Why is the present value of $100 that you expect to receive one year from today worth less than $100 received today? Give an example.

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