Go to www.bankrate.com. Under Popular Calculators, select the Simple Savings Calculator, which allows you to determine the savings that will accrue over time if you reduce various expenses. You can input the monthly reduction in expenses and the number of years you will save that amount; the calculator also allows you to select the rate of interest you will receive on your savings.
a. Assume you decided to eat out less frequently and could reduce spending by $40 per month. Use the calculator to determine how much extra savings you could accumulate over the next five years.
b. What if you could also reduce the amount you spend on entertainment by $35 per month? Enter this information to determine how much this could add to your savings over the next five years.
c. How much could you accumulate over twenty-five years if you could save $75 per month and earn a 5% return?