TVOM Concept and Components

Introduction

Smiling man at A T M with cash.

John is an acquaintance of yours. He is a marketing major and has made the dean's list every semester. John decides to start up a small consulting company during his senior year. He has approached you and asked you to lend him $10,000, which he will pay back after three years.

After some careful consideration, you decide to lend him the money. How much should you expect back after three years? The same amount, or more or less than $10,000? Why?