Answer:
$20,768.53
Step-by-step explanation:
The formula for the future value of an ordinary annuity is ...
FV = R((1 +r/12)^(nt) -1)/(r/12)
= 1325((1+0.00625)^15-1)/0.00625 = 1325(0.097964758/0.00625)
= 1325(15.674361)
= 20,768.529
The future value of the annuity is $20,768.53.
_____
Comment on the math
We cannot tell where the answer choices came from.
It appears that 20,731.85 came from using a monthly interest rate of 0.006, rather than 0.00625. The higher numbers require an interest rate in excess of 13.6%. The lower number is impossible, as the total of payments is $19,875.
The best wrong answer is choice C.
