Karen and Mike currently insure their cars with separate companies, paying $500 and $700 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 4 percent? Use Exhibit 1-B. (Round FVA factor to 3 decimal places and final answer to 2 decimal places.)

Karen and Mike currently insure their cars with separate companies, paying $500 and $700 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 4 percent? Use Exhibit 1-B. (Round FVA factor to 3 decimal places and final answer to 2 decimal places.) 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)