Brenda plans to reduce her spending by $50 a month. what would be the future value of this reduced spending over the next 10 years? (assume an annual deposit to her savings account and an annual interest rate of 3 percent.) use exhibit 1-b. (round fva factor to 3 decimal places and final answer to 2 decimal places.)

$6987.07

Explanation:

Since the Brenda will be saving $50 every month for the period of 10 years, therefore, the future value of annuity formula will be applicable for the purpose of calculation of future value.

Future value=R[((1+i)^n)-1/i]

Here R= monthly amount to be saved =$50

i=interest rate=3/12=0.25%

n=number of payments=10*12=120

Future value=50[((1+0.25%)^120)-1/0.25%]=$6987.07

you will have $2593.74 in 10 years if you set aside $1,000 at 10%

you will have $9321.91 in 20 years if you set aside $2000 at 8%

you will have $1469.32 in 5 years if you set aside $1000 at 8%

you will have $1296.87 in 10 years if you set aside $500 at 10%

you will have $239.66 in 15 years if you set aside $100 at 6%

you will have $4660.96 in 20 years if you set aside $1000 at 8%