For compound interest, you need to add 3% interest onto the interest already put into the account- In this case, £2000.
So, you find what £2000 + 3% interest is equalling £2060 (£60 interest per year)
Now that you've found the £60 interest, you add 3% onto that, too. Equalling £61.8 (£1.80 interest per year)
So, add the £120 for the two years normal interest to the initial amount - Equalling £2120.
Add the two years interest on the interest (£1.80 x 2 = £3.60)
The final amount = £2123.60