The population of a city is 125000.

Here,

$\mathrm{P}=$ Initial population $=125,000$

Annual birth rate $=\mathrm{R}_{1}=5.5 \%$

Annual death rate $=\mathrm{R}_{2}=3.5 \%$

Net growth rate, $\mathrm{R}=\left(\mathrm{R}_{1}-\mathrm{R}_{2}\right)=2 \%$

$\mathrm{n}=$ Number of years $=3$

$\therefore$ Population after three years $=\mathrm{P}\left(1+\frac{\mathrm{R}}{100}\right)^{\mathrm{n}}$

$=125,000\left(1+\frac{2}{100}\right)^{3}$

$=125,000(1.02)^{3}$

$=132,651$

Hence, the population after three years will be $132,651 .$