Answer- We will use the following formula-Amount= principle (1 rate/100)^timeHence, A = 8000 (1 15/100)^3 = rs. 12,167. CI= A-P12167-8000 = rs. 4167 is the interest after 3 years compounded annually.

Principal Amount and Interest Rate:
The principal amount, or the initial deposit made by Right, is Rs 8000. The interest rate offered by the finance company is 15% per annum.

Compound Interest Formula:
To calculate the compound interest, we can use the formula:
A = P(1 + r/n)^(nt) - P
Where:
A = the final amount after compounding
P = the principal amount
r = the annual interest rate (as a decimal)
n = the number of times interest is compounded per year
t = the number of years

In this case, the interest is compounded annually, so n = 1.

Calculation:
Using the formula, we can calculate the compound interest earned by Right after 3 years.

A = 8000(1 + 0.15/1)^(1*3) - 8000
A = 8000(1 + 0.15)^3 - 8000
A = 8000(1.15)^3 - 8000
A = 8000(1.521) - 8000
A = 12168 - 8000
A = 4168

Therefore, Right earns a compound interest of Rs 4168 after 3 years.

Explanation:
Compound interest is the interest earned on both the initial deposit (principal amount) and any previous interest that has been added to the total amount. It differs from simple interest, where interest is only calculated on the principal amount.

In this case, Right deposited Rs 8000 with a finance company for 3 years at an interest rate of 15% per annum. The interest is compounded annually. Using the compound interest formula, we calculated that Right would earn a compound interest of Rs 4168 after 3 years.

The formula takes into account the principal amount, the interest rate, the number of times interest is compounded per year, and the number of years. By plugging in the values and performing the calculations, we determined the final amount (A) after compounding and subtracted the principal amount (P) to find the compound interest earned.

Compound interest is a powerful concept as it allows the initial deposit to grow exponentially over time. By reinvesting the earned interest, the total amount increases more quickly compared to simple interest. This makes compound interest a popular choice for long-term investments.