If the simple interest on a sum of money at 5% per annum for 3 years is Rs. 1200, find the compound interest on the same sum for the same period at the same rate.

Correct Answer : A.

Clearly, Rate = 5% p.a., Time = 3 years, S.I.= Rs. 1200.    

So principal=RS [100*1200]/3*5=RS 8000

Amount = Rs. 8000 x [1 +5/100]^3 - = Rs. 9261.

 C.I. = Rs. (9261 - 8000) = Rs. 1261.