An ATM with a service fee of $3 is used by a person 200 times in a year. What would be the future value in 5 years (use a 2 perc
2 answers:
Complete question:
An ATM with a service fee of $3 is used by a person 200 times in a year. What would be the future value in 5 years (use a 2 percent rate) of the annual amount paid in ATM fees? Use Exhibit 1-B. (Round time value factor to 3 decimal places and final answer to 2 decimal places.)
Answer:
The future value of the annual amount paid in ATM fees is $662.40
Explanation:
Where;
FV is the future value of the annual amount paid in ATM fees
PV is the present value of the annual amount paid in ATM fees
i is the interest rate
T is the time.
Given;
PV = $3 × 200 = $600
i = 2% = 0.02
T = 5 years
FV = $662.40
Therefore, the future value of the annual amount paid in ATM fees is $662.40
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A mortgage of $80,000 with 2 points means the borrower would have to pay at closing $800 is false because the real pay at closing is $1,600.
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