John inherited $5,000 from his grandfather. He put it in a savings account to buy a car when he turns 16. John is 13 right now. If his savings account earns 7% over the next 3 years, how much will be in the account when he turns 16?

If it is 7% per year, which is customary for stating interest rates, then:

Simple interest: 5000 + 5000 *.07 * 3 = 5000 * 1.21 = 5000 + 1050 = 6050

Compound interest: 5000 * 1.07^3 = 5000 * 1.225 = 6125 (approx)

If it is a total of 7% over three years (which is more realistic in today's environment),

5000 * 1.07 = 5350.