Uniform series, (F/A, i, N)

Here is my life example similar to the Aunt Bill pop quiz.

I smoked 1.5 packs a day from 1995 to 2005. I think I was paying about $3.50 to $4.00 a pack. I started buying cheaper smokes when Marlboro’s went over $4.00 a pack. So lets use $3.75/pack.

$3.75 x 1.5 packs/day = $5.63/day $5.63 x 30days = $168.90/month = A

10years x 12months = 120 months = N $168.90 x 120 = $20268 I spent on cigs

30cigs x 30days x 120months = 108000 cigs I smoked

I have savings account with an interest rate of 1%(i=1%). If I would have put my $168.90/month in there instead of my lungs, I would have…

F=$168.90(F/A, 1%, 120) from table (pg 877 in 3rd edition) (F/A, i, N) =230.0387

F=$168.90(230.0387) = $38853.50

I could have nearly doubled my money, instead it went up in smoke.

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License