1. What is simple interest? 2. What is compound interest? Why is it important? 3. What kinds of personal financial decisions have you made that involve compound interest? 4. What is an annuity? Is an annuity worth more or less than a lump sum payment received now that would be equal to the sum of all the future annuity payments? 5. What type of compounding would you prefer in your savings account? Why? 6. Contrast the calculation of future (terminal) value with the calculation of present value. What is the difference? 7. What is the advantage of using present value tables rather than formulas? 8. If you are scheduled to receive a certain sum of money five years from now but wish to sell your contract for its present value, which type of compounding would you prefer to be used in the calculation? Why? 9. The "Rule of 72 " suggests that an amount will double in 12 years at a 6 percent compound annual rate or double in 6 years at a 12 percent annual rate. Is this a useful rule, and is it an accurate one? 0. Does present value decrease at a linear rate, at an increasing rate, or at a decreasing rate with the discount rate? Why? 1. Does present value decrease at a linear rate, at an increasing rate, or at a decreasing rate with the length of time in the future the payment is to be received? Why? 2. Sven Smorgasbord is 35 years old and is presently experiencing the "good" life. As a result, he anticipates that he will increase his weight at a rate of 3 percent a year. At present he weighs 200 pounds. What will he weigh at age 60