The future value (FV) of an amount (P) deposited in an account with interest (r) coumpounded t times a year for n years is given by:
[tex]FV=P\left(1+\frac{r}{t}\right)^{nt}[/tex]
Given that she started with $500 and earned 2 percent interest compounding annually this means that there is only one compounding in a year, i.e. t = 1.
Thus, the amount in his bank account after 3 years is given by:
[tex]FV=500(1+0.02)^3 \\ \\ =500(1.02)^3=500(1.061) \\ \\ =\bold{\$530.60}[/tex]
