Final answer:
To find the future value of the annuity, use the formula: Future Value = Payment × [(1 + interest rate/n)^(n × time) - 1] / (interest rate/n). Substitute the given values into the formula and calculate the expression.
Step-by-step explanation:
To find the future value of the annuity, we can use the formula:
Future Value = Payment × [(1 + interest rate/n)^(n × time) - 1] / (interest rate/n)
Plugging in the given values:
Payment = $3900
Interest rate = 1.74%
Compounding periods per year = 4 (quarterly)
Time = 5.5 years
Substituting these values into the formula:
Future Value = $3900 × [(1 + 0.0174/4)^(4 × 5.5) - 1] / (0.0174/4)
Calculating this expression will give us the future value of the annuity.