b$)$ Elementary Finance:

If an sunount of money $S$$ is put in a bank account giving an annual interest rate $r,$ the amount of interest

camed aficer a year is by definition $r.SS$

The sum $ thus becomes after one year $S_{.}(1+r)$$$.$ For instance, if $S=100$$ and $r=7\%,$ the sum becomes $S.$

$=107S$ aficer a year.

If this sum $SS$ is now placed at the same rate $r$ for $n$ years, which final amount does one get?

Conversely, which sum in $ should one place in an account for $n$ years in order to get at the end an

amount $SS?$ This sum is called the present value of

Is it smaller or larger than $ $?$