The formula for compound interest is A = P (1 + R/100)ⁿ
• where Principal amount = $12, 000
• interest rate R = 7%
• and n = 4 years
A = P (1 + R/100)ⁿ
= 12,000( 1+ 7/100)^ 4
= 12,000( 1+0.07)^4
= 12,000(1.07)^4
= $15729.55
• After 4 years, interest = $15,729
,• And, compound interest = $15,729 -$12, 000
=$3729.55
Therefore, compound interest is $3729.55