Answer:
5%
Explanation:
You want the interest rate that makes the difference between compound and simple interest on ₹8000 for two years be ₹20.
Interest formulas
The formula for the value of an account earning simple interest is ...
A = P(1 +rt) . . . . P earning interest rate r for t years
The formula for the value of an account earning compound interest is ...
A = P(1 +r)^t . . . . P earning interest rate r for t years
Application
We want the difference in these amounts over 2 years to be ₹20.
8000(1 +r)^2 -8000(1 +2r) = 20
1 +2r +r^2 -(1 +2r) = 20/8000 . . . . . divide by 8000, expand the square
r^2 = 1/400 . . . . . . simplify
r = 1/20 = 5% . . . . . take the square root
The rate of interest is 5% per year.