An account is governed by compound interest. The discount for three years on $2120 is $250. Find the amount of interest for two years on $380.

I guess my first question is "What is the meaning of "The discount for three years on $2120 is $250"?"

Is it accumulating on a discount, and that's the amount accumulated? Or is it like, borrowing on a discount, and that's the amount paid in advance?

Secondly, how would I solve that?

Thanks,