Answer:

To calculate the amount of money in a savings account after a certain number of years with a certain interest rate, we can use the formula:

A = P + Prt

Where A is the final amount, P is the principal (initial amount), r is the interest rate, and t is the number of years.

For simple interest,

A = $1000 + ($1000 * 0.03 * 3) = $1000 + $90 = $1090

For compounded annually,

A = P(1 + r)^t

A = $1000 * (1 + 0.03)^3 = $1000 * 1.03^3 = $1000 * 1.0927 = $1092.7

So, with 3% per year for 3 years, when the interest is not compounded (simple interest), the $1000 would become $1090. And when the interest is compounded annually, the $1000 would become $1092.7

Therefore, over the same period of time, compounding the interest annually results in a slightly higher final amount.

Step-by-step explanation: