Final answer:
The balance after 3 years is approximately $741.89.
Step-by-step explanation:
To find the balance after 3 years, we can use the formula for compound interest: A = P(1 + r/n)^(nt), where A is the final amount, P is the principal amount, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years. In this case, the principal is $700, the interest rate is 2%, and interest is compounded quarterly. Substituting these values into the formula, we get A = 700(1 + 0.02/4)^(4*3).
Calculating this expression, we find that the balance after 3 years is approximately $741.89.