Your 13-year old cousin knows that you are in college and learning corporate finance. She is very interested in knowing about the time value of money and tells you: “Cousin, I want to be a millionaire and learn everything about the time value of money. I need you to explain some concepts that I read on the internet, but I don’t quite understand. 1.What is compounding and discounting? 2.What is the difference between them? 3.why should I be willing to invest in the promise that I will receive a future payment? 4.Does the answer depend on who is making the promise?"

Your 13-year old cousin knows that you are in college and learning corporate finance. She is very interested in knowing about the time value of money and tells you: “Cousin, I want to be a millionaire and learn everything about the time value of money. I need you to explain some concepts that I read on the internet, but I don’t quite understand. 1.What is compounding and discounting? 2.What is the difference between them? 3.why should I be willing to invest in the promise that I will receive a future payment? 4.Does the answer depend on who is making the promise?"

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter6: Saving And Investing

Section: Chapter Questions

Problem 25AA

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3.why should I be willing to invest in the promise that I will receive a future payment?

4.Does the answer depend on who is making the promise?"

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