Given:
Beau's grandmother started depositing $500 in a savings account each year in his birthday
Rate of simple interest = 2.5%
Time = 3 years
To find:
The interest.
Solution:
Formula for simple interest:
where, P is principal, r is rate of interest and t is time in years.
Interest for first year is
New principal =
Interest for second year is
New principal =
Interest for third year is
Total interest for 3 years is
So, interest after 3 years is $75.
Therefore, the correct options A.