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If a person spends $20 a week on coffee (assume $1,000 a year), what would be...

If a person spends $20 a week on coffee (assume $1,000 a year), what would be the future value of that amount over 7 years if the funds were deposited in an account earning 3 percent? Use Exhibit 1-B. (Round time value factor to 3 decimal places and final answer to 2 decimal places.)

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Answer #1
Formula to calculate future value of annuity
Future value Annuity amount*(((1+r)^n)-1)/r
r is interest rate and n is number of years
Calculation of future value is shown below
Future value 1000*(((1.03^7)-1)/0.03)
Future value 1000*7.662
Future value $7,662.00
Thus, future value of the amount spend would be $7,662.00
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