Answer:
The formula for calculating the future value of an investment with compound interest is:
A = P(1 + r/n)^(nt)
where A is the future value, P is the principal (initial amount), r is the annual interest rate (as a decimal), n is the number of times the interest is compounded per year, and t is the time period in years.
In this case, P = $2500, r = 0.0125 (1.25% as a decimal), n = 12 (since the interest is compounded monthly), and t = 4.
Plugging these values into the formula, we get:
A = 2500(1 + 0.0125/12)^(12*4) ≈ $2,628.11
Therefore, the answer is $2628.11.