mai tran plans to set aside $2,500 a year for the next six years, earning 5 percent. what would be the…

Explanation:

Step1: Identify the formula

The formula for the future - value of an ordinary annuity is $FVA = A\times\frac{(1 + r)^{n}-1}{r}$, where $A$ is the annual payment, $r$ is the interest rate per period, and $n$ is the number of periods.

Step2: Define the values

Here, $A=$2500$, $r = 0.05$ (since 5%=0.05), and $n = 6$.

Step3: Calculate $(1 + r)^{n}$

$(1 + 0.05)^{6}=1.05^{6}\approx1.3400956406$.

Step4: Calculate $(1 + r)^{n}-1$

$1.3400956406-1 = 0.3400956406$.

Step5: Calculate $\frac{(1 + r)^{n}-1}{r}$

$\frac{0.3400956406}{0.05}=6.801912812$.

Step6: Calculate the future - value

$FVA=2500\times6.801912812=$17004.78203\approx$17004.78$.

Answer:

$17004.78$