Assertion (A) : By increasing ₹ 320 by 20%, we obtain the increased amount = ₹ 348.

Reason (R) : To increase a quantity by a percentage, we first find the percentage of the quantity and then add it to the original quantity.

1. Both A and R are correct, and R is the correct explanation for A.

2. Both A and R are correct, and R is not the correct explanation for A.

3. A is true, but R is false.

4. A is false, but R is true.