an investment of $5,000 is made for 3 years with 7% annual compound interest. the table below can be used to…

Explanation:

Step1: Identify principal amount

The principal is the initial investment. From the table, the total investment is $5,000, so the principal $P = 5000$.

Step2: Calculate simple - interest per year on principal

The interest rate $r=7%=0.07$. The simple - interest formula for one - year on the principal is $I = Pr$. Substituting $P = 5000$ and $r = 0.07$, we get $I=5000\times0.07 = 350$.

Step3: Calculate interest on interest in the second year

In the first year, the interest is $I_1 = 350$. In the second year, the interest on the first - year's interest (compound interest part) is calculated using the same rate. The interest on the $350$ (the first - year's interest) at a 7% rate is $I_{on - I}=350\times0.07=24.5$. The total interest in the second year is the sum of the simple interest on the principal and the interest on the first - year's interest. The simple interest on the principal in the second year is still $350$ (since $I = Pr$ and $P$ and $r$ are constant for the principal). So the total interest in the second year is $350 + 24.5=374.5$. But we are asked for the interest on interest in the second year, which is $24.5$.

Answer:

1. $5,000
2. $350
3. $24.5