contestada

Assume a person saves $62 a month by using coupons and doing comparison shopping.
a. what is the amount of annual savings? annual savings amount $
b. what would be the future value of this annual amount over 10 years, assuming an interest rate of 4 percent

Respuesta :

Kalahira
a) Annual savings would be $62 * 12 = $744
   
b) Future value of the first year savings over 10 years would be = $ 744 * (1 + 0.04)^10 = $1101.30. However, if the person adds $744 every year to the compound interest, the total saving should be around $10,391.15.