



 
Kenneth, If you invest $1000 for 1 year at 5% then at the end of the year you have $(1000 + 0.05*1000). Your calculation of
is the result of making 3 investments of $1000 each, at 5% for 1 year. The compound interest calculation you mention
is the result of investing $1000, once for three years at 5%, compounded annually. At the end of the first year you have
"Compounding" means that this amount is reinvested at 5% and hence at the end of the second year you have
Compounding again for year three gives you
Rather than perform these three calculations you can perform the one calculation
I hope this helps,  


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