Personal Finance 1st Edition by Jack R. Kapoor

Exercise 28

Future Value of Reduced Spending. Brenda plans to reduce her spending by $80 a month. Calculate the future value of this increase in saving over the next 10 years. (Assume an annual deposit to her savings account, and an annual interest rate of 5 percent.) (Obj. 5)

Step 1 of 2

Future value of saving over the next 10 years can be calculated as follows-

The formula for calculating the future value of annuity is

Given: