1. **State the problem:** Wendy makes monthly payments of 400 for 12 years into an ordinary annuity with an annual interest rate of 6.8%. We want to find the future value of the annuity when she retires. 2. **Formula for future value of an ordinary annuity:** $$FV = P \times \frac{(1 + r)^n - 1}{r}$$ where: - $P$ is the payment per period - $r$ is the interest rate per period - $n$ is the total number of payments 3. **Convert annual interest rate to monthly rate:** $$r = \frac{6.8\%}{12} = \frac{0.068}{12} = 0.0056667$$ 4. **Calculate total number of payments:** $$n = 12 \text{ years} \times 12 \text{ months/year} = 144$$ 5. **Substitute values into the formula:** $$FV = 400 \times \frac{(1 + 0.0056667)^{144} - 1}{0.0056667}$$ 6. **Calculate $(1 + r)^n$:** $$ (1 + 0.0056667)^{144} = 1.0056667^{144} \approx 2.25219$$ 7. **Calculate numerator:** $$2.25219 - 1 = 1.25219$$ 8. **Calculate fraction:** $$\frac{1.25219}{0.0056667} \approx 221.01$$ 9. **Calculate future value:** $$FV = 400 \times 221.01 = 88404.00$$ **Answer:** The value of Wendy's annuity when she retires will be approximately **88404.00**.