Question

If you spend $15 a week on coffee, what would be the future value of that amount over 10 years if instead of buying coffee you saved the money at the end of each year in an account with 3% APY?

Answer 1

$ 19.5

Explanation: If you save $15 instead of spending it on coffee, you would be receiving simple interest of 3% pa for 10 years. At the end of the tenth year the total interest amount you would receive would be 30% of $ 15 ie; $ 4.5

3% pa for 10 years = 30% at the end of 10 years

30% of $ 15 = $ 4.5

The aggregate amount saved at the end year is

$15 + $4.5 = $19.5