Explanation:

To determine the yearly rate of compound interest, consider the given information:

- The amount grows from Rs2,000 in 3 years to Rs2,400 in 4 years.

- In 1 year, the amount increases by Rs400 (Rs2,400 - Rs2,000).

Now, let's find the rate:

- Initial Amount at the end of 3 years: Rs2,000

- Amount after 4 years: Rs2,400

- The formula for compound interest for 1 year can be written as:

$$

A = P \times (1 + r)^n

$$

where $A$ is the amount after 4 years, $P$ is the amount after 3 years, $r$ is the rate, and $n$ is 1 year.

- Calculation:

$$

2400 = 2000 \times (1 + r)

$$

$$

1 + r = \frac{2400}{2000} = 1.2

$$

- Solving for $r$:

$$

r = 1.2 - 1 = 0.2

$$

- Convert to percentage:

$$

r = 20\%

$$

- Correct Option:

- Option 1: 20%