A person invests $1000 in a savings account with an annual interest rate of 5%, compounded annually. What will be the balance after 3 years?

Wed, 06 May 2026 18:22:26 +0000

**A person invests $1000 in a savings account with an annual interest rate of 5%, compounded annually. What will be the balance after 3 years?** When curiosity meets practical finance, one question quietly gains momentum: *What will be the balance after 3 years if a person invests $1,000 in a savings account earning 5% annual interest, compounded each year?* This isn’t just a math problem—it reflects a growing interest in understanding how everyday savings grow over time, especially amid shifting economic conditions. In recent years, rising awareness around financial literacy has pushed more US households to explore low-risk ways to build wealth. Savings accounts, particularly those offering compound interest, remain a trusted tool for those seeking stability without complexity. The power of compounding—earning interest not just on the principal but on previously earned interest—is quietly transforming how people plan for goals like emergencies, education, or retirement. ### How Does Compound Interest Work on a $1,000 Investment?