Answer:
Interest earn= $80.14
Explanation:
Giving the following information:
PV= $1,000
i= 7%
n= 3
First, we will calculate the future value at the second year:
FV= PV*(1+i)^n
FV= 1,000*(1.07^2)
FV= 1,144.9
Now, for the third year:
FV= 1,144.9*1.07= 1,225.04
Interest earn= 1,225.04 - 1,144.9= $80.14
