compounded anually means
if you put x in at y percent then
you calculate like this
if you put in x at y percent then the money you earn is
x +(x times y)=z=first year
second year=z+(z times y)=s
third year=s+(s times y)=t
percent means parts out of 100 so 5%=5/100=0.05
'of' can be translated as multiply
so
3000 +(3000 times 0.05)=3150=fisrt year
3150+(3150 times 0.05)=3307.5=second year
3307.5 +(3307.5 times 0.05)=3472.88=tird year
he will have 3472.88 at end of 3 years
