On December 30, you decide to make a $1,600 charitable donation. (Assume you ite

Question

On December 30, you decide to make a $1,600 charitable donation. (Assume you itemize your deductions,J (a) If you are in the 28 percent tax bracket, how much will you save in taxes for the current year? snings for the oument year (bl H you deposit that tax savings in a savings account for the next five years at 3 percent, what will be the future value of thet accoune? Use ExhibitA (Round tme value fector to 3 decimal places and final answer to 2 decimal places) Pe of20 cops lock command option contol option command

Explanation / Answer

a. amount saved in taxes = 1600*0.28 = 448

b. N = 5, PV = 0, PMT = 448, rate = 3%

use FV funciton in Excel

future value = 2,378.49

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