Answer:
Option (c) $7,672
Explanation:
Data provided in the question:
Investment amount i.e principle = $9,875
Interest rate,r = 4.8%
Time, t = 12 years
Now,
Future value = Principle ×[tex]\left( 1 + \frac{r}{n} \right)^{\Large{n \cdot t}}[/tex]
n = number of times compounded per year
Future value =[tex]= 9875\times\left( 1 + \frac{ 0.048 }{ 12 }\right)^{\Large{ 12 \cdot 12 }}[/tex]
Future value =[tex]9875\times{ 1.004 } ^ { 144 }[/tex]
Future value =[tex]9875\times1.776866[/tex]
Future value = $17,546.55
Also,
Future value = Principle + Interest
Therefore,
$17,546.55 = $9,875 + Interest
or
Interest = $17,546.55 - $9,875
= 7671.55 ≈ $7,672
Hence,
Option (c) $7,672
