A savings account pays 2 percent interest compounded annually. If 1 dollars comma 200 is deposited initially and again at the first of each year, how much money will be in the account three years after the initial deposit?

The initial $1,200 earns interest for three years, while the deposits at the start of years 2 and 3 earn interest for two and one years. The total is $1,200(1.02^3 + 1.02^2 + 1.02) = $3,745.9296, which rounds to $3,745.93. So the account will contain $3,745.93, choice D.

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