Question 73442
Use the formula:
{{{A=P(1+r/n)^(nt)}}}Where A is the return, P is the invested amount, r is the interest rate, n is the compound frequency (since its annually n=1) and t is the time t=2 years
{{{A=1000(1+.12)^(2)}}}
{{{A=1000(1.12)^(2)}}}
{{{A=1000(1.2544)}}}
{{{A=1254.4}}}
So after two years you'll have $1,254.4. This seems like a lot but doing more of these problems will help you grasp them better.