Answer:
$1.075.
Step-by-step explanation:
To calculate the future value of a dollar invested at 7.5 percent interest compounded annually for one year, you can use the formula for compound interest:
Future Value = Principal × (1 + Interest Rate)^Number of Periods
In this case, the principal (P) is $1, the interest rate (r) is 7.5 percent (or 0.075 as a decimal), and the number of periods (n) is 1.
Plugging in these values into the formula:
Future Value = $1 × (1 + 0.075)^1
Calculating the expression inside the parentheses:
Future Value = $1 × (1.075)^1
Evaluating the exponent:
Future Value = $1 × 1.075
Calculating the final result:
Future Value = $1.075
Therefore, a dollar invested today at a 7.5 percent interest compounded annually will be worth $1.075 one year from now.