You are currently paying $775 in interest on your credit cards annually. If, instead of paying...
You are currently paying $775 in interest on your credit cards annually. If, instead of paying interest, you saved this amount every year, how much would you accumulate in a tax-deferred account earning 5% over the next 10 years?
Homework Answers
Future value of annuity=Annuity[(1+rate)^time period-1]/rate
=$775[(1.05)^10-1]/0.05
=$775*12.57789254
=$9747.87(Approx).
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