1) Since this investment has been in an account with 12% compound interest per year, then we can write out the following:
a) Note that there was no withdrawal during this first year.
[tex]\begin{gathered} F=P(1+\frac{r}{n})^{nt} \\ F=6000(1+\frac{0.12}{1})^{1\cdot1} \\ F=6000(1.12)^1 \\ F=6720 \end{gathered}[/tex]b) To find out the amount of money over a course of this time 2 years, then we can write out the following:
[tex]\begin{gathered} F=P(1+\frac{r}{n})^{nt} \\ F=6000(1+\frac{0.12}{1})^{1\cdot2} \\ F=7526.4 \end{gathered}[/tex]In this case, it is also compounded per year. Just the period (t) is greater than the other one.
So, we can tell the following about the earnings of this investment:
[tex]a)\$6720,b)\$7526.40[/tex]