The simple interest on a certain sum at the end of three years at 5% per annum is Rs 1200. The compound interest on the same sum for the same period at the same rate is (interest compounded annually):

Simple interest for 3 years at 5% is Rs 1200, so annual SI = 400. Since SI = P×R×T/100, we have 1200 = P×5×3/100, giving P = 8000. Compound interest for 3 years: P(1.05)³ - P = 8000(1.157625) - 8000 = 9261 - 8000 = 1261. Option B is correct. Option A (1800) is simple interest for different parameters. Option D (1260) is close but doesn't account for compounding properly.