Start by changing the percent to a decimal. Move the decimal two places to the left and it changed 2.5% into 0.25.
Next, you need to find out how much interest has been accrued within 3 years by multiplying all of our variables.
1000 x 0.25 x 3 = 750
This shows that they have earned $750 in just interest in the 3 years.
We'll now add this to the principal of $1,000.
1000 + 750 = 1750
At the beginning of the 4th year, they'll have $1,750.
