Using your results to explain why this statement is true: A dollar in hand today is worth more than a dollar to be received next year, assuming interest rates are positive.

What is compounding? What would the future value of $100 be after 5 years at 10% compound interest? Suppose you currently have $2,000 and plan to purchase a 3-year certificate of deposit (CD) that pays 4% interest, compounded annually. How much will you have when the CD matures? How would your answer change if the interest rate were 5%, or 6%, or 20%?