The C.I. on ₹ 1,000 at 20% per annum and in 2 years is:

1. ₹ 1,440

2. ₹ 1,240

3. ₹ 440

4. ₹ 220

For 1st year:

P = ₹ 1,000

R = 20%

T = 1 year

$\text{Interest} = \Big(\dfrac{P \times R \times T}{100}\Big)\\[1em] = ₹ \Big(\dfrac{1,000 \times 20 \times 1}{100}\Big)\\[1em] = ₹ \dfrac{20,000}{100}\\[1em] = ₹ 200$

And

$\text{Amount = P + Interest}\\[1em] = ₹ 1,000 + 200\\[1em] = ₹ 1,200$

For 2nd year:

P = ₹ 1,200

R = 20%

T = 1 year

$\text{Interest} = \Big(\dfrac{P \times R \times T}{100}\Big)\\[1em] = ₹ \Big(\dfrac{1,200 \times 20 \times 1}{100}\Big)\\[1em] = ₹ \dfrac{24,000}{100}\\[1em] = ₹ 240$

And

$\text{Final amount = P + Interest}\\[1em] = ₹ 1,200 + 240\\[1em] = ₹ 1,440$

And

$\text{Compound Interest = Final amount - Original Principal}\\[1em] = ₹ 1,440 - ₹ 1,000\\[1em] = ₹ 440$

Hence, option 3 is the correct option.