Years ago I was in a class where the day's topic was the present value and future value of money. The teacher asked for a volunteer. As you know, kids are reluctant to volunteer. He finally got a volunteer. The student came up, he gave the student a dollar and said thanks for volunteering and he could sit back down. Then he asked for another volunteer. Now lots of volunteers. He picked one. He gave the student a business card which he wrote on the back that he could redeem it for a dollar one year from that date. The student sat back down.
Then the instructor asked the first volunteer if he wanted to trade, which he didn't. The instructor asked him "Why not trade? They're both worth a dollar. Well, how much would you charge to trade?" Needless to say, the following discussion made the differences between present value and future value and risks in future investments become crystal clear. And he never had to resort to any arithmetic. That really taught me the importance of present value of investments that mature in the future. So I think of for example, a dollar three years from now is only worth a little over $0.86 today at 5% interest. A different way to look at it, but easier to explain to kids. I had that business card stuck on my bulletin board in my office for years. Don't know what ever happened to it. ---------------------------------------------------------------------- For information about J forums see http://www.jsoftware.com/forums.htm
