Final answer:
The total amount in the account at the beginning of the 4th year with simple interest is $1075, which is the sum of the original $1000 principal and $75 of interest earned over three years at a 2.5% annual rate.
Step-by-step explanation:
You've asked about the future value of an investment with simple interest. To calculate this, we use the formula for simple interest, which is Interest = Principal × Rate × Time. Given that the principal is $1000, the annual interest rate is 2.5%, and the time is 3 years, the interest earned is calculated as follows:
Interest = $1000 × 0.025 × 3 = $75
Adding this interest to the original principal gives us the total amount in the account at the beginning of the 4th year:
Total amount = Principal + Interest = $1000 + $75 = $1075
Therefore, the correct answer is A. $1075.