Final answer:
To find the balance after 3 years with compound interest, use the formula P(1 + r/n)^(nt) and plug in the values. In this case, the balance is approximately $420.97.
Step-by-step explanation:
To find the balance after 3 years with compound interest, we can use the formula P(1 + r/n)^(nt), where P is the principal amount, r is the 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 amount is $375, the interest rate is 4%, and interest is compounded annually, so n is 1. Plugging in the values, we get:
$375(1 + 0.04/1)^(1*3) = $375(1.04)³ ≈ $420.97
Therefore, the balance after 3 years with compound interest is approximately $420.97.