Greg puts $10,000 into an equity indexed annuity which allows compounding on gains within the annuity. The product has a minimum guaranteed return of 3% annually. Greg's participation rate is 90% of the S&P 500 index in years exceeding the minimum guaranteed return. There is also a cap of 10% on gains. After 3 years and with no fees taken into consideration, Greg is trying to figure out the value of his equity indexed annuity. Returns were as follows: Year 1 - 12.5%
Year 2 - -4.0%
Year 3 - 5%
With these returns, Greg should find that the balance of his annuity is approximately which of the following after year 3?
[A] $11,750
[B] $11,840
[C] $12,032
[D] $12,167