Answer:
Total FV= $13,356
Step-by-step explanation:
Giving the following information:
Initial investment (FV)= $12,000
Number of periods (n)= 2 years
Interest rate= 5% first year
Interest rate= 6% second year
To calculate the future value, we need to use the following formula:
FV= PV*(1+i)^n
FV1= 12,000*1.05= 12,600
FV2= 12,600*1.06= $13,356
Total FV= $13,356
Compound interest= (0.05 + 0.06)/2= 0.055
