the compoud interest formula is given by
[tex]A=P(1+\frac{r}{n})^{n\cdot t}[/tex]
where A is the final amount including principal, P is the principal, r is the annual interes rate (fraction form) , t is the number of years and n is the number of times of interest is compounded per year.
In our case, P=$400, r=0.05, n=1 and t=3 years.By substituting these values into the compound formula, we get
[tex]\begin{gathered} A=400(1+\frac{0.05}{1})^{1\cdot3} \\ \text{which gives} \\ A=400(1+0.05)^3 \end{gathered}[/tex]
therefore, the answer is option B
