Sherrod deposits $500 each year in a savings account earning 3% interest compounded annually. He makes no withdrawals. How much interest will the account earn after 3 years?

The formula for annual compound interest, including principal sum, is:

A = P (1 + r/n) (nt)

Where:

A = the future value of the investment/loan, including interest

P = the principal investment amount (500)

r = the annual interest rate (.03)

n = the number of times that interest is compounded per year (1)

t = the number of years the money is invested (3)

A=5000 (1+.03/1) ^1 (3)

A=546.36

Interest (I) gained is A-P

I=546.36-500

I=46.36