As a rising business reporter for a financial newspaper, you are given the task of preparing a series of articles that explain the power of time value of money. The editor would like you to address several specific questions in addition to demonstrating for the audience the use of time value of money techniques by applying them to several problems. Kindly prepare your response the following request.

1- Explain, with your own words, the concept of time value of money. Why do we say that 1,000 EUR today do not have the same value than 1,000 EUR next year? (10p)

2- Explain, with your own words, the difference between a simple interest rate investment and a compound interest rate investment? Which is the best option? Why? (10p)

3- Explain, with your own words, the concepts of compounding and discounting and provide an example. (10p)

4- Explain, with your own words, the concept of the compounding period (or frequency). If we invest the same amount of money in two different financial products that offer the same interest rate (but with different compounding period), why will we get a different amount at the end? (10p)

5- What will 10,000 EUR invested for 10 years at 9 percent compounded annually grow to?