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Explain what is meant by the time value of money

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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.

Reference no: EM133137590

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