Answer:
Option B. $2821.54
Step-by-step explanation:
we know that
The formula for the future value of an ordinary annuity is equal to:
[tex]FV=P[ \frac{(1+ \frac{r}{n} )^{nt} -1}{ \frac{r}{n} } ][/tex]
where
[tex]FV[/tex] is the future value
[tex]P[/tex] is the periodic payment
[tex]r[/tex] is the interest rate in decimal form
[tex]n[/tex] is the number of times the interest is compounded per year
[tex]t[/tex] is the number of years
In this problem we have
[tex]P=\$75[/tex]
[tex]t=3\ years[/tex]
[tex]r=3\%=0.03[/tex]
[tex]n=12[/tex]
Substitute in the formula above
[tex]FV=\$75[\frac{(1+ \frac{0.03}{12})^{12*3} -1}{ \frac{0.03}{12}}][/tex]
[tex]FV=\$75[\frac{(1.0025)^{36} -1}{ 0.0025}]=\$2,821.54[/tex]
