Annual savings = 30*12 = $360
Annual interest rate = 3%
Future value of annuity = Amount*[{(1+r)^n – 1}/r]
Hence, future value = 360*[{(1+3%)^13 – 1}/0.03]
= $5,622.4046
i.e. $5,622.40
Note: The value can also be calculated by using table i.e. 360*Future value annuity factor(3%, 13 years)
Problem 2-12 (LO2.4) Brenda plans to reduce her spending by $30 a month. What would be...
Problem 2-13 (LO2.4) Brenda plans to reduce her spending by $90 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 interest rate of 4 percent.) Use Exhibit 1.B. (Round time value factor to 3 decimal places and final an annual answer to 2 decimal places.) Future value
Problem 2-13 (LO2.4) Brenda plans to reduce her spending by $85 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 4 percent.) Use Exhibit 1-B. (Round time value factor to 3 decimal places and final answer to 2 decimal places.) Future value References eBook &Resources Worksheet Difficulty: Basic Problem 2-13 (LO2.4) Learning Objective: 02-04 Connect money management activities...
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Brenda plans to reduce her spending by $90 a month. Calculate the future value of this increase in savings over the next 18 years. (Assume an annual deposit to her savings account, and an annual interest rate of 8 percent.) Use Exhibit 1-B. (Round time value factor to 3 decimal places and final answer to 2 decimal places.) Future value Period 1% 10% 201 202 2.06 1 2 203 3,091 2. 2.31 .11 3.242 3.03 3.06 3.246 3.184 4,375 2.09...
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