An ATM with a service fee of $2 is used by a person 100 times in a year. What would be the future value in 10 years (use a 3 percent rate) of the annual amount paid in ATM fees?

Answer:$2.699

Explanation: Using the compound interest formula:

Future value FV = P (1+r/n) ^nt

Where FV=?

P = 2

r=0.03

n=100

t = 10

Plugging the values, we get

FV = 2 (1+0.03/100) ^100*10

FV = 2 (1+0.0003) ^1000

FV = 2 (1.0003) ^1000

FV = 2 (1.35)

FV = 2.7