Chapter 2: Questions: 1. What is compounding. and why is it important? 2. Why is knowledge of the time value of money usefur? 3. Explain the terms PV and P. 4. What rate is the most often used for timievalue of moner calculations? Problems: 1. What is the preient value of a $20,000 sum to be given sixyears from now if the discount rate is 8 percent? 2. What is the future value of an investment of 518,000 that wil earn intereat at 5% and fall due in seven years? Chapter 5: Queptions