[tex]FV\text{ = 2500(1+0}.03)^4\text{ (option A)}[/tex]Explanation:
Amount invested = $2500
rate = 3% = 0.03
n = number of times compounded
n = annually = 1
time = 4 years
To get the future value after 4 years, we will apply the compund interest formula:
[tex]\begin{gathered} FV\text{ = P(1 +}\frac{r}{n})^{nt} \\ \text{where FV = future value} \\ P\text{ = principal = 2500, r = rate, t = time} \\ n\text{ = number of times compounded} \end{gathered}[/tex]
substitute the values into the formula:
[tex]\begin{gathered} FV\text{ = 2500(1 + }\frac{0.03}{1})^{1\times4} \\ FV\text{ = 2500(1+0}.03)^4 \\ \\ FV\text{ = 2500(1+0}.03)^4\text{ (option A)} \end{gathered}[/tex]
