Personal Finance 1st Edition by Jack R. Kapoor

Exercise 11

Future Value of Wise Buying. If a person saves $63 a month by using coupons and doing comparison shopping, (a) what is the amount for a year? (b) What would be the future value of this annual amount over 10 years, assuming an interest rate of 4 percent? (Obj. 1)

Step 1 of 3

Calculate the Future value:

Future value is the value obtained by compounding the present value of annuity payments and the principal at the given discount rate and the number of years.

Given:

Saving per month	$63
Duration	10 years
Interest rate	4%