Answer:
d. None of the above
Step-by-step explanation:
We assume the sequence of deposits is ...
month 0: $400
month 1: $200
month 2: $200
...
month 240: $200 . . . . accumulated interest is determined at this point
That is, no interest is earned on the last deposit.
_____
The value of the initial $400 deposit after 20 years at 2.15% interest compounded monthly is ...
$400×(1 +.0215/12)^(12×20) = $400×1.536666 ≈ $614.67
The value of the $200 annuity at the same interest rate is ...
$200((1 +.0215/12)^(12×20) -1)/(.0215/12) = $200×299.534612 ≈ $59,906.92
So, the total account value is ...
$614.67 +59,906.92 = $60521.59
The total amount deposited was ...
$400 +$200×240 = $48,400
The interest earned is the difference between the account value and the total of deposits:
$60,521.59 -48,400 = $12,121.59 . . . . interest earned
This value does not match any numerical answer choice, so we conclude the appropriate answer is ...
None of the above
