X Take just two periods; 1 and 2. x Let r denote the interest rate per period., if r = 0.5 then $1 saved at the start of period 1 becomes $1+$0.50 =...

X Take just two periods; 1 and 2. x Let r denote the interest rate per period. E.g., if r = 0.5 then $1 saved at the start of period 1 becomes $1+$0.50 = $1.50 at the start of period 2. x And if r = 0.1 then $100 saved at the start of period 1 becomes $110 at the start of period 2. x The value next period of $1 saved now is the future value of that dollar. Suppose you can pay now to obtain $1 at the start of next period. X What is the most you should pay? X $1?