If it has an annual return of 7% it increases with 0.07 times the last year's investment. That means that the total amount of money one year later is 1.07 times the original amount of money.
After one year, the total amount of money is:
104 * 1,07 = 1.07 * 104
After two years, the total amount of money is:
104 * 1,07 * 1.07 = 104 * 1,072 = ...
After three years:
104 * 1,07 * 1.07 * 1.07 = 104 * 1,073 = ...
Indeed, after x years, the total amount of money, T(x), has grown to:
T(x) = 104 * 1.07x