- We infer a value upon money – this is caused by interest.
- Formula to calculate the value of the money (Compound interest):
$1,000 (Today) x 1.1 = $1,100 (Future) 1st year
$1,100 x 1.1 = $1,210 2nd year
- “Coke is back to bottling their products” (instead of having another firm to do that): they calculate the future profit value and the present value.
- Facebook share price is dropping
- Europe lending more money will only increase its debt since all the countries that lend the money desire a higher interest rates.