Final answer:
The correct answer to the monthly payment for Sarafina's annuity is option B, $66.22. This is calculated using the future value annuity formula with a 4.8% annual interest rate and a 9-month term.
Step-by-step explanation:
The correct answer is option B. $66.22. To calculate Sarafina's monthly payments to the annuity, we must consider the formula for the future value of an annuity.
The formula is Future Value = Payment × { [(1 + r)^n - 1] / r }, where:
- r is the monthly interest rate
- n is the total number of payments
- Payment is the amount deposited every month
Firstly, we convert the annual interest rate to monthly interest rate by dividing by 12. So the monthly interest rate is 0.004 (4.8% / 12).
The number of payments, n, is 9, since Sarafina will make payments over 9 months. We plug these values into the formula and solve for the monthly payment, which gives us $66.22.
Therefore, with a 4.8% annual interest rate compounded monthly, to achieve a future value of $600 in 9 months, Sarafina's monthly payment should be $66.22.