Problem 3-11 Future Value of Reduced Spending [LO3-4] Brenda plans to reduce her spending by $80 a month. Calculate the future value of this increase in savings over the next 10 years. (Assume an annual deposit to her savings account, and an annual interest rate of 4 percent.) (Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, Exhibit 1-D) Note: Use appropriate factor(s) from the tables provided. Round time value factor to 3 decimal places and final answer to 2 decimal places. Future value Exhibit 1-B Future Value (Compounded Sum) of $1 Paid In at the End of Each Period for a Given Number of Time Periods (an Annuity) 3% 1.000 2.030 4% 1.000 2.040 3.091 3.122 4.184 4.246 5.309 5.416 6.468 6.633 7.662 7.898 8.892 9.214 10.159 10.583 11.464 12.006 12.808 13.486 14.192 15.026 15.618 16.627 17.086 18.292 18.599 20.024 21.825 23.698 25.645 Period 1 2 3 4 5 6 6 7 7 8 9 10 11 12 13 14 15 16 17 18 19 20 25 30 40 50 1% 1.000 2.010 3.030 4.060 5.101 6.152 7.214 8.286 9.369 10.462 11.567 12.683 13.809 14.947 16.097 17.258 18.430 19.615 20.811 22.019 28.243 34.785 48.886 64 463 2% 1.000 2.020 3.060 4.122 5.204 6.308 7.434 8.583 9.755 10.950 12.169 13.412 14.680 15.974 17.293 18.639 20.012 21.412 22.841 24.297 32.030 40.568 60.402 84 579 20.157 21.762 23.414 25.117 26.870 36.459 47.575 75.401 112 797 27.671 29.778 41.646 56.085 95.026 152 667 5% 1.000 2.050 3.153 4.310 5.526 6.802 8.142 9.549 11.027 12.578 14.207 15.917 17.713 19.599 21.579 23.657 25.840 28.132 30.539 33.066 47.727 66.439 120.800 209 348 6% 1.000 2.060 3.184 4.375 5.637 6.975 8.394 9.897 11.491 13.181 14.972 16.870 18.882 21.015 23.276 25.673 28.213 30.906 33.760 36.786 54.865 79.058 154.762 290 336 7% 1.000 2.070 3.215 4.440 5.751 7.153 8.654 10.260 11.978 13.816 15.784 17.888 20.141 22.550 25.129 27.888 30.840 33.999 37.379 40.995 63.249 94.461 199.635 496 529 8% 1.000 2.080 3.246 4.506 5.867 7.336 8.923 10.637 12.488 14.487 16.645 18.977 21.495 24.215 27.152 30.324 33.750 37.450 41.446 45.762 73.106 113.283 259.057 573 770 9% 1.000 2.090 3.278 4.573 5.985 7.523 9.200 11.028 13.021 15.193 17.560 20.141 22.953 26.019 29.361 33.003 36.974 41.301 10% 1.000 2.100 3.310 4.641 6.105 7.716 9.487 11.436 13.579 15.937 18.531 21.384 24.523 27.975 31.772 35.950 40.545 45.599 51.159 11% 57.275 98.347 164.494 442.593 1.000 2.110 3.342 4.710 6.228 7.913 9.783 11.859 14.164 16.722 19.561 22.713 26.212 30.095 34.405 39.190 44.501 50.396 56.939 64.203 114.413 199.021 581.826 46.018 51.160 84.701 136.308 337.882 815 984 1 163 999 1 668 771

Problem 3-11 Future Value of Reduced Spending [LO3-4] Brenda plans to reduce her spending by $80 a month. Calculate the future value of this increase in savings over the next 10 years. (Assume an annual deposit to her savings account, and an annual interest rate of 4 percent.) (Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, Exhibit 1-D) Note: Use appropriate factor(s) from the tables provided. Round time value factor to 3 decimal places and final answer to 2 decimal places. Future value Exhibit 1-B Future Value (Compounded Sum) of $1 Paid In at the End of Each Period for a Given Number of Time Periods (an Annuity) 3% 1.000 2.030 4% 1.000 2.040 3.091 3.122 4.184 4.246 5.309 5.416 6.468 6.633 7.662 7.898 8.892 9.214 10.159 10.583 11.464 12.006 12.808 13.486 14.192 15.026 15.618 16.627 17.086 18.292 18.599 20.024 21.825 23.698 25.645 Period 1 2 3 4 5 6 6 7 7 8 9 10 11 12 13 14 15 16 17 18 19 20 25 30 40 50 1% 1.000 2.010 3.030 4.060 5.101 6.152 7.214 8.286 9.369 10.462 11.567 12.683 13.809 14.947 16.097 17.258 18.430 19.615 20.811 22.019 28.243 34.785 48.886 64 463 2% 1.000 2.020 3.060 4.122 5.204 6.308 7.434 8.583 9.755 10.950 12.169 13.412 14.680 15.974 17.293 18.639 20.012 21.412 22.841 24.297 32.030 40.568 60.402 84 579 20.157 21.762 23.414 25.117 26.870 36.459 47.575 75.401 112 797 27.671 29.778 41.646 56.085 95.026 152 667 5% 1.000 2.050 3.153 4.310 5.526 6.802 8.142 9.549 11.027 12.578 14.207 15.917 17.713 19.599 21.579 23.657 25.840 28.132 30.539 33.066 47.727 66.439 120.800 209 348 6% 1.000 2.060 3.184 4.375 5.637 6.975 8.394 9.897 11.491 13.181 14.972 16.870 18.882 21.015 23.276 25.673 28.213 30.906 33.760 36.786 54.865 79.058 154.762 290 336 7% 1.000 2.070 3.215 4.440 5.751 7.153 8.654 10.260 11.978 13.816 15.784 17.888 20.141 22.550 25.129 27.888 30.840 33.999 37.379 40.995 63.249 94.461 199.635 496 529 8% 1.000 2.080 3.246 4.506 5.867 7.336 8.923 10.637 12.488 14.487 16.645 18.977 21.495 24.215 27.152 30.324 33.750 37.450 41.446 45.762 73.106 113.283 259.057 573 770 9% 1.000 2.090 3.278 4.573 5.985 7.523 9.200 11.028 13.021 15.193 17.560 20.141 22.953 26.019 29.361 33.003 36.974 41.301 10% 1.000 2.100 3.310 4.641 6.105 7.716 9.487 11.436 13.579 15.937 18.531 21.384 24.523 27.975 31.772 35.950 40.545 45.599 51.159 11% 57.275 98.347 164.494 442.593 1.000 2.110 3.342 4.710 6.228 7.913 9.783 11.859 14.164 16.722 19.561 22.713 26.212 30.095 34.405 39.190 44.501 50.396 56.939 64.203 114.413 199.021 581.826 46.018 51.160 84.701 136.308 337.882 815 984 1 163 999 1 668 771