Question 4918
the refrigerator currently costs 1200. 

Let's say this is 100% and we are in year zero
In year one the refrigerator will be 103%(.03 times year one value + year one value)
In year two the refrigerator will increase an additional 3%, BUT it is 3% of year one's value (.03*103+103)=106.09
In year three, the refrigerator again increases 3% of year two's value, so it is (.03*106.09+106.09)=109.273%

So if we multiply 1.09273 by the current cost, we see that the refrigerator will cost $1,311.27