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4. Explain in words why a dollar has different values dependent on point in time received, and how present valuing or future valuing cash-flows corrects
4. Explain in words why a dollar has different values dependent on point in time received, and how present valuing or future valuing cash-flows corrects for these differences. Also, look at the mathematics of the annuity versus the annuity due, and explain why the annuity is 1+r more valuable. Finally, create an amortization table using your calculator (like in the notes) and explain why the amount of interest paid is decreasing, and the principle paid is increasing.
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