Problem 10-11 Calculating Future Value of
Insurance Savings [LO10-6]

Beverly and Kyle currently insure their cars
with separate companies, paying $640 and
$625 a year. If they insured both cars with the
same company, they would save 10 percent on
the annual premiums.

What would be the future value of the annual
savings over 10 years based on an annual
interest rate of 3 percent? Use Exhibit 1-B.
Note: Do not round intermediate calculations.
Round time value factor to 3 decimal places
and final answer to 2 decimal places.
Future value of annual savings: