I confused with the concept 'APR with compounding' and 'APR without compounding.' Can anyone tell me the difference and how to solve for each scenario? I attached example about 'APR without compounding.'

9. Three years ago, you deposited $1000 in a savings account with a 4% APR. The bank pays interest monthly with no compounding. How much interest did you earn last year? A) $40.00 B) $40.74 C) $43.26 D) $51.27