A sum, when invested at 12.5% simple interest per annum, amounts to Rs. 8,250 after 2 years. What is the simple interest?

Explanation

Given: Rate of interest = 12.5% per annum Time = 2 years Amount after 2 years = Rs. 8,250 To Find: Simple Interest (S.I.) Step 1: Use the Simple Interest Formula The formula for the amount (A) in terms of principal (P), rate (R), and time (T) with simple interest is: A = P + S.I. Since S.I. = (P × R × T) / 100, we can write: A = P + (P × R × T) / 100 Step 2: Substitute the Values and Solve for Principal (P) We know the amount (A) after 2 years is Rs. 8,250: 8,250 = P + (P × 12.5 × 2) / 100 Simplify: 8,250 = P + (P × 25) / 100 8,250 = P (1 + 0.25) 8,250 = P × 1.25 Now, divide both sides by 1.25 to find P: P = 8,250 / 1.25 = 6,600 Step 3: Calculate the Simple Interest (S.I.) Now that we know the principal (P) is Rs. 6,600, we can find the simple interest: S.I. = (P × R × T) / 100 S.I. = (6,600 × 12.5 × 2) / 100 Calculate the simple interest: S.I. = (6,600 × 25) / 100 = 1,650 Final Answer: The simple interest is Rs. 1,650.