At the end of each year, you plan to deposit $2,500 in a savings account. The account will earn 7% annual interest, which will be added to the fund balance at year-end. The first deposit will be made at the end of Year 1.

How much interest revenue did the fund earn in the second year? In the third year?

My idea:

1st year: 2500 deposited, no interest revenue earned

2nd year: (2500 from 1st year + 2500 from 2nd year) * 7%=350, but the correct answer is 175, I don't know why.

3rd year: ((2500 from 1st year + 2500 from 2nd year+ 2500 from 3rd year+ 350)* 7%, this is also wrong, I don't know why.

Please show the detailed calculations with explanations. I'm really lost. Thank you!