To give you an idea of how we will be using present and future values, consider the following

simple investment. Your company proposes to buy an asset for $335. This investment

is very safe. You would sell off the asset in three years for $400. You know you could invest

the $335 elsewhere at 10 percent with very little risk. What do you think of the proposed

investment?

This is not a good investment. Why not? Because you can invest the $335 elsewhere at

10 percent. If you do, after three years it will grow to: