Explanation:

- The current population of the town is 350,000.

- The population increases at a rate of 20% annually.

- To find the population after 2 years, use the compound interest formula: $P=P_0(1+r{)}^n$, where $P_0$ is the initial population, $r$ is the growth rate, and $n$ is the number of years.

- Here, $P_0=350,000$, $r=0.2$, and $n=2$.

- Calculate: $P=350,000\times (1+0.2{)}^2=350,000\times 1.44=504,000$.

- Option 3: 504,000 is the correct answer.

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