Explanation:

- To find the rate of interest, we use the compound interest formula:

$$ \text{A} = \text{P}(1 + \frac{r}{100})^n $$

where A is the amount, P is the principal, r is the rate of interest, and n is the number of years.

- Given:

\(\text{P} = 18,000\),

\(\text{CI} = 7,920\),

\(\text{n} = 2\).

- First, calculate A:

\(\text{A} = \text{P} + \text{CI} = 18,000 + 7,920 = 25,920\).

- We rearrange the formula:

$$ 25,920 = 18,000(1 + \frac{r}{100})^2 $$

- Solving for r:

$$ (1 + \frac{r}{100})^2 = \frac{25,920}{18,000} $$

$$ (1 + \frac{r}{100})^2 = 1.44 $$

- Take the square root:

$$ 1 + \frac{r}{100} = 1.2 $$

- Solving for r:

$$ \frac{r}{100} = 0.2 $$

$$ r = 20\% $$

- Correct Answer: Option 3: 20%