Ok so, as we can see in the question, he has $40 in his account and he earns 10% interest each year (annually).
So to find the interest he earns each year, we need to find 10% of 40.
Simply multiply 40 by 0.10 and that gives us 4
This means that Micheal earned $4 in that first year. 4 + 40 = 44
Micheal has $44 in the first year of his savings account.
Now we need to find 10% of 44.
44 × 0.10 = 4.4
Now Michael has made $4.40 in interest of the second year.
So we add 4.4 and 44 and we get 48.4
Michael has $48.40 in his savings account on the second year.
For the last year, we find 10% of 48.40!
0.10 × 48.40 = 4.84
This means that Michael has made $4.84 in the third year of saving his money.
Now we add 4.84 and 48.40 and that gives us...
$53.24!
