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

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.)

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