Answer:
The future value is $ 422.10.
Step-by-step explanation:
When an amount is compounded monthly,
Then its future value is,
[tex]A=P(1+\frac{r}{1200})^t[/tex]
Where, P is the present value or principal value,
r is the annual rate of interest,
t is the number of months,
Here,
P = $ 420, r = 3 % and t = 2 months,
Thus, the future value of the amount is,
[tex]A=420(1+\frac{3}{1200})^2[/tex]
[tex]=420(1.0025)^2[/tex]
[tex]=422.102625\approx \$ 422.10[/tex]
Option A is correct.
