Interest per annum

Question

Tom has $600,000. He purchased saving bonds at 8% per annum. After the first year he cashed the bond in and put the same sale on the bond at the bank which offered 15% internet. How much money does he have after 3 years?

Answer 1

So, in the first year, Tom's $600,000 earned 600000*.08. Add that back to the original 600000. Now take this new amount and multiply it by the new interest rate. Add it back in. Do this once more to represent the third year.