The compound interest received on ₹18,000 for 2 years is ₹7,920, when the interest is compounded annually. What is the rate of interest per annum?

20%

The Formula that we used here is -

Amount = P$(1 \;+\; \frac{R}{100})^t$

Compound Interest = Amount - Principal

18000 + 7920 = 18000 [ 1 + \(\frac{R}{100}\)]²

25920 = 18000 [ 1 + \(\frac{R}{100}\)]²

\(\frac{25920}{18000}\) = [ 1 + \(\frac{R}{100}\)]²

(\(\frac{36}{25}\))²  = [ 1 + \(\frac{R}{100}\)]²

\(\frac{6}{5}\) = 1 + \(\frac{R}{100}\)

\(\frac{R}{100}\) = \(\frac{1}{5}\)

R = 20%