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"Education is the most powerful weapon which you can use to change the world”
– Nelson Mandela

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Q Question 1 5 / 5 pts Why is a dollar worth more today than a dollar received one year from now? Question 2 5 / 5 pts Explain the difference between Compounding and Simple Interest. Your Answer: Question 3 5 / 5 pts Explain the Rule of 72 and provide an example. Question 4 5 / 5 pts Discuss discounting as it relates to Present Value.

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1.A dollar worth more today than a dollar received one year from now is because of the time value of money. A dollar is worth more today because of inflation and various other reasons. Due to inflation, the price increases over a certain period of time and subsequently there is a decrease in the buying power of the dollar. Opportunity Cost also plays a very important role in the time value of money because it involves a benefit which is forgone by an individual for choosing one alternative over the other alternatives available.