Question: If you owe 100 dollar and the interest rate is 5%,
Is there any difference if you pay,
A) 100 dollar this year
B) 105 dollar next year
C) 110.25 dollar the year after the next?
Question 2: You pay the banker 100 dollar, and the banker save the money in
a investment vehicle and earns 5% a year. After 2 years, the money grows to
110.25. Did you pay the interest of 10.25? Keep in mind that you will pay
the banker 110.25 if you pay him 2 year later.