Correct Answer - Option 4 : Rs. 1261

**Given:**

Principal = Rs. 8000

Rate = 5%

Time = 3 years.

**Formula used:**

C.I = P[(1 + R/100)N – 1]

**Calculation:**

C.I = P[(1 + R/100)^{N} – 1]

⇒ C.I = 8000[(1 + 5/100)^{3} – 1]

⇒ C.I = 8000 × [(21/20)^{3} – 1]

⇒ C.I = 8000 × [(9261 – 8000)/8000]

⇒ C.I = (8000 × 1261/8000)

⇒ C.I = Rs. 1261

**∴ The compound interest is Rs. 1261**