If the compound interest on a principal for one year is ₹350 and the compound interest for the second year is ₹420, find the rate of interest.

30% 20% 25% 15%

20%

Difference in interest of 2nd and 3rd year = 420 - 350 = Rs. 70 Rate of interest = \(\frac{70}{350}\) × 100% = \(\frac{1}{5}\) × 100% = 20%