Answer:
$5,030
Step-by-step explanation:
Year 1 – $2,500 × 1.06
Year 2 – $2,500 × 1.06 × 1.06 = $2,500 × 1.06²
Year 3 – $2,500 × 1.06 × 1.06 × 1.06 = 1.06³
…
Year 12 – $2,500 × 1.06 × 1.06 × 1.06 × 1.06 × … = $2,500 × 1.06^12 ≈ $2,500 × 2.012
(so it doubles in value)
Value at end of year 12 = $2,500 × 1.06^12 = $2,500 × 2.012 ≈ $ 5,030
