Simple and compound interest-present value concept

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Reference no: EM1329169

1. Can you explain the difference between "simple" and "compound" interest? Please provide some of the uses of compound interest in business.
I also need to know the effects of using compound interest when evaluating future value transactions and calculations.

2. What is "present value"? What is an example of the "present value" concept? How does a single cash flow present valueexample differ from an annuity calculation?

3. How is a home mortgage an example of TVM? How can you show that more interest is paid at the beginning of a loan period than at the end?

Reference no: EM1329169

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