Correct Answer – Option 2 : 20 percent

Given:

The principle = 4000 and Time = 2 years

Formula used:

\(CA\ =\ P\ \times {(1\ +\ {R\ \over 100})^T}\)

(Where CA = Compounded amount, P = The principle, R = The rate of interest and T = Time)

Calculation:

Let us assume the rate of interest be R

⇒ \(5760\ =\ 4000\ \times {(1\ +\ {R\over 100})^2}\)

⇒ \({5760\over4000} =\ {(1\ +\ {R\over 100})^2} \)

⇒ \(1.44 =\ {(1\ +\ {R\over 100})^2}\)

⇒ \(1.2\ =\ {1\ +\ {R\over 100}}\)

⇒ R = 20%

∴ The required result will be 20%.