Find the future value one year from now of a $7,000 investment at a 3% annual compound interest rate. Also calculate the future value if the investment is made for 2 yeaars?

To find the future value of an investment, we can use the formula for compound interest:

Future Value = Principal * (1 + Interest Rate)^Number of Periods

For the first scenario, where the investment is made for one year with a 3% annual compound interest rate, we can plug in the values:

Principal = $7,000
Interest Rate = 3% = 0.03 (in decimal form)
Number of Periods = 1

So, the future value after one year can be calculated as:

Future Value = $7,000 * (1 + 0.03)^1

Simplifying the equation, we get:

Future Value = $7,000 * 1.03

By multiplying, we find that the future value after one year would be $7,210.

For the second scenario, where the investment is made for two years, we can use the same formula:

Principal = $7,000
Interest Rate = 3% = 0.03 (in decimal form)
Number of Periods = 2

Now, let's calculate the future value after two years:

Future Value = $7,000 * (1 + 0.03)^2

Simplifying the equation, we get:

Future Value = $7,000 * 1.0609

By multiplying, we find that the future value after two years would be $7,426.30.