Given is the rate of interest 6.25% #color (blue)"compounded annually"#.

Money deposited in the account #=$color(red)"125,000"#

For compound Interest problems

#$1# becomes after 1 year #=(1+(color(blue)"Annual % rate of Interest")/100)#

After 2 years #=(1+("Annual % rate of Interest")/100)^2#

After 3 years #=(1+("Annual % rate of Interest")/100)^3#

..

..

..

After #color (magenta)n# years #=(1+("Annual % rate of Interest")/100)^color(magenta)n#

Remember we started with #$1# as initial deposit. Therefore, General equation becomes:

Compound amount after #n# years #=color(red)"Initial Deposit"xx(1+("Annual % rate of Interest")/100)^n#

Inserting given values

For compounded Interest rate at 6.25% annual, #$125,000# becomes after #n# year

#=125000xx(1+(6.25)/100)^n#

Amount of money received by Dusty after #n# years #=125000xx(1+(6.25)/100)^n#