This is a monthly compounded investment with additional investment at the end of the year.
First year:
Investment, P: $1000
interest rate, r: 0.25% = 0.0025
Number of periods, n = 12
Return: P* (1 + r)^n = 1000 * (1+0.0025)^12 = 1,030.416
Second year:
Investment: 1030.416 + 50 = 1,080.416
r = 0.0025
n = 12
Return: 1080.416 * (1+0.025)^12 = 1,113.278 = 1,113.28
Now you have to add the $50 that she puts at the end of the second year => 1,113.28 + 50 = 1,163.28
Answer: $1,163.28 (option d.)
