notice, that, at the beginning of the 4th year, you're only getting interest for the previous 3 years, since the fourth year is just starting and hasn't accumulated any interest yet,
[tex]\bf ~~~~~~ \textit{Simple Interest Earned Amount}\\\\
A=P(1+rt)\qquad
\begin{cases}
A=\textit{accumulated amount}\\
P=\textit{original amount deposited}\to& \$1000\\
r=rate\to 2.5\%\to \frac{2.5}{100}\to &0.025\\
t=years\to &3
\end{cases}
\\\\\\
A=1000(1+0.025\cdot 3)\implies A=1000(1.075)[/tex]
