If a person spends $18 a week on coffee (assuming $900 annually), the money would be worth $7,725 in 8 years if it were placed into an account generating 2%.
Define the monthly contribution you'll make (P), the period-to-period return rate (r), and the total number of periods you'll contribute (n). Subtract one from and divide the result by r. Multiply the result by P and you will obtain the future value of an annuity.
Here
Annual deposit amount = $ 900
Number of years = 8
Interest Rate = 2%
Using the Future Value Annuity Table, the future value of the retirement account will be determined.
FVAF (2%, 8 years) = 8.583
Future Value = 900 × 8.583 = $7,725
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