Given the monthly payment. r the annual interest rate, r, and the number of monthly payments, nt, find the future value of the annuity. solve using the formula for the future value of an
ordinary annuity
r=s1,325, r = 7.5% nt = 15
o a 515,548 89
o b. $21.532.42
oc. $20,731.85
od. $21.732.08

  $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.