The compound interest on Rs. 4,000 after 3 year is Rs. 630.50. Then the rate of interest compounded yearly is:

$$\eqalign{ & 4630.50 = 4000{\left( {1 + \frac{R}{{100}}} \right)^3} \cr & 9261 = 8000{\left( {1 + \frac{R}{{100}}} \right)^3} \cr & \frac{{9261}}{{8000}} = {\left( {1 + \frac{R}{{100}}} \right)^3} \cr & {\left( {\frac{{21}}{{20}}} \right)^3} = {\left( {1 + \frac{R}{{100}}} \right)^3} \cr & \frac{{21}}{{20}} = \left( {1 + \frac{R}{{100}}} \right) \cr & \frac{1}{{20}} = \frac{R}{{100}} \cr & R = 5 \cr} $$