# 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?

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At the beginning: 12500

After 1 year: 12500 + R × 12500 = 12500(1 + R)

After 2 years: 12500(1 + R) + R × 12500 = 12500(1 + 2R)

After 3 years: 12500 × (1 + 3R)

After 4 years: 12500 × (1 + 4R)

After n years: 12500 × (1 + nR)

12500 (1 + 4R) = 15500

1 + 4R = 15500 ÷ 12500

1 + 4R = 1.24

4R = 1.24 - 1

4R = 0.24

R = 0.06 = 6%

p = 12500

t = 4

I = Interest amount = total amount - principle amont

= 15500 - 12500

= 3000

let, rate of interest = r

p × t× r / 100 = 3000

⇒(12500 × 4 × r ) / 100 = 3000

⇒500 r = 3000

⇒ r = rate of interest = 3000/500 = 6 %