Answer: 2,315.25$
Explication: If joe starts off with 2,000$ and his savings increase by 5% every year then you can use the exponential growth formula.
F(x) = a(1+r)^x
While this looks confusing it is very simple with a calculator. A = our initial number, in this case 2,000.
R = our growth rate, in this case 0.05 (or 5% as a decimal)
and x = our time, in this case 3 years
Knowing this we can put 2,000(1+.05)^3 into our calculator.
If you do not have a calculator you can also solve this by doing 5% of 2000 (.05 * 2000) which you can then add to your original number before finding 5% again. Example:
.05 * 2000 = 100
.05 * 2100 = 105
.05 * 2205 = 110.25
(Now that its been 3 times we add our final product to the new base number)
2205 + 110.25 = 2315.25
