Personal Finance 1st Edition by Jack R. Kapoor

Exercise 30

Calculating the Value of Reduced Spending. If a person spends $15 a week on coffee (assume $750 a year), what would be the future value of that amount over 10 years if the funds were deposited in an account earning 3 percent? (Obj. 4)

Step 1 of 2

Future Value of $15 saved per week (as per assumption $750 a year) over 10 years deposited in an account earning 3 percent can be find by using the formula of Future value annuity.

Future value of an annuity is as follows:

Where,