Correct Answer - Option 4 : Rs. 1261
Given:
Principal = Rs. 8000
Rate of interest = 5% per annum
Time = 3 years
Formula used:
A = P(1 + r/100)n
Compound interest = A - P
Where, A = Amount
P = Principal
r = Rate of interest
n = Time in years
Calculation:
A = 8000(1 + 5/100)3
⇒ A = 8000 × 21/20 × 21/20 × 21/20
⇒ A = 9261
Compound interest = 9261 - 8000
⇒ Compound interest = Rs. 1261
∴ Compound interest is Rs. 1261.