Hi Donna,

I am assuming your interest rate is 7% per year, compounded once a year. Thus at the end of the first year you will have your original $45.00 plus 7% of $45.00. Hence at the end of the first year you will have

$45.00 + (0.07 $45.00) = $45.00 (1 + 0.07) = $45.00 (1.07)

This amount you reinvest for the second year and hence at the end of the second year you will have
$45.00 (1.07) plus 7% of $45.00 (1.07) which is

$45.00 (1.07) (1 + 0.07) = $45.00 (1.07) (1.07) = $45.00 (1.07)²

This amount you reinvest for the third year and hence at the end of the third year you will have

$45.00 (1.07)³

and so on.

Penny