1)Compute the future value of $2,000, at an interest rate of 5%, compounded annually, in 6 years.

Formula: FV_n= PV₀ x (1+r)ⁿ

• Write out each step you used to solve the problem you were assigned, and provide the solution to the problem as well.
  • Present your final solution as a decimal approximation carried out to the second decimal point (e.g., $000.00).
• Explain the meaning of the problem and your solution in your own words.
• Explain your answers to the following questions:
  • If the rate in the problem was higher, would the solution be higher or lower?
  • If the time period in the problem was shorter, would the solution be higher or lower?