At a 10% interest rate, every $____ spent today reduces the amount of a person's savings by almost $100 in 10 years.

Question

Quizplus · Accepted Answer

At a 10% interest rate, the future value of $1 after 10 years is calculated using the formula FV = PV(1 + r)^n, where FV is the future value, PV is the present value, r is the annual interest rate, and n is the number of years. To find the present value that would grow to $100 in 10 years at a 10% interest rate, we rearrange the formula to PV = FV / (1 + r)^n. Substituting FV = $100, r = 0.10, and n = 10, we get PV = $100 / (1 + 0.10)^10 ≈ $38.55.

At a 10% Interest Rate, Every $____ Spent Today Reduces