Calculate the compound interest and the total amount on Rs. 8000 invested at an annual interest rate of 5% for 3 years, with interest compounded yearly.

Explanation

The amount A is calculated using the formula A = P(1 + r)^n, where P = 8000, r = 5% = 0.05, and n = 3 years. Thus, A = 8000 × (1.05)^3 = 8000 × 1.157625 = Rs.9261. The compound interest is the difference between the amount and principal: 9261 - 8000 = Rs.1261.