Answer:
$16,974.57
Step-by-step explanation:
The formula for future value is given by
[tex]FV=PMT\frac{(1+i)^{n}-1}{i}[/tex]
where
FV = future value
PMT = amount deposited each period and is given as 200
i = rate per period = r/m where r is the interest rate and m the frequency of compounding. Here it is mentioned that r = 2.25% and interest is compounded annually ie once per year so m = 1
i = 2.25%/1 = 2.25% = 2.25/100 = 0.0225
The number of payments n = 48 since we make quarterly payments (4 per year) and we are asked to compute for 12 years
Plugging these values into the formula gives
[tex]FV=200\frac{(1+0.0225)^{48}-1}{0.0225}[/tex]
which evaluates to
$16,974.57 which can be rounded up to $16975
depending on the accuracy you desire
