To find the employee's annual salary at the end of the second year, we need to calculate the increase for each year and add it to the original salary.
First, we calculate the increase for the first year:
Increase = 3% of $65,000
Increase = 0.03 * $65,000
Increase = $1,950
Now, we can calculate the salary at the end of the first year by adding the increase to the original salary:
Salary at end of first year = $65,000 + $1,950
Salary at end of first year = $66,950
Next, we calculate the increase for the second year:
Increase = 3% of $66,950
Increase = 0.03 * $66,950
Increase = $2,008.50
Finally, we can calculate the salary at the end of the second year by adding the increase to the salary at the end of the first year:
Salary at end of second year = $66,950 + $2,008.50
Salary at end of second year = $68,958.50
Therefore, the employee's annual salary at the end of the second year with the company will be $68,958.50.