Answer:
The correct answer is $20,543.17.
Explanation:
According to given scenario, the given data are as follows:
1st Payment (Pmt) = $6,500 for 12 Quarters
Interest rate = 4%
2nd payment = $5,000 for 8 Quarters
3rd payment = $7,500 for 4 Quarters
So, future value can be calculated as follows:
FV = 1st PV (1 + r )^n + 2nd PV (1 + r )^n + 3rd PV (1 + r )^n
FV = $6,500 × ( 1 + 4%/4)^12 + $5,000 × (1 + 4%/4)^8 + $7,500 × (1 + 4%/4)^4
= $6500 × (1.01)^12 + $5,000 × (1.01)^8 + $7,500 × (1.01)^4
= $7,324.36 + $5,414.28 + $7,804.53
= $20,543.17
Hence, the correct answer is $20,543.17.
