Answer:
$132,612.50
Step-by-step explanation:
We will use the present value - future value formula. WHich is:
[tex]FV=PV(1+r)^t[/tex]
Where
FV is the future value (amount)
PV is the present value (amount)
r is the rate of interest (per year)
t is the number of years
In the problem given, the present amount (PV) is 125,000. The rate of interest (r) is 3%, or 0.03. And the time frame is 2 years, or t = 2.
Plugging these info in the equation, we can get the future value as shown:
[tex]FV=PV(1+r)^t\\FV=125,000(1+0.03)^2\\FV=125,000(1.03)^2\\FV=132,612.5[/tex]
This is the future vallue of $125,000 3% in 2 years.
