A sum of Rs. 12,500 amounts to Rs. 15,500 in 4 years at the rate of simple interest. What is the rate of interest?

🧠 Explanation:

A sum of Rs. 12,500 growing to Rs. 15,500 in 4 years at simple interest has a rate of 6%. Using the formula for simple interest, Interest = Principal × Rate × Time / 100, the interest is 15,500 − 12,500 = 3,000. Thus, 3,000 = 12,500 × Rate × 4 / 100, solving to Rate = 6%. This calculation is key in finance, helping understand loan or investment growth. Simple interest is widely used in banking, making this a practical example for economic studies and financial planning.