A sum of Rs.25000 amounts to Rs.32000 in 4 years. What is the rate of interest?

Correct option is A

Given:

Principal (P) = Rs.25000
Amount (A) = Rs.32000
Time (T) = 4 years

Formula Used:

The formula for simple interest is:
Simple Interest (SI) = A - P
We can find the rate of interest (R) using the formula:
​$$R = \frac{SI \times 100}{P \times T}$$​​

Solution:

The simple interest (SI).

SI = A - P = Rs.32000 - Rs.25000 = Rs.7000

​$$R = \frac{SI \times 100}{P \times T} \\\ \\\Rightarrow R = \frac{7000 \times 100}{25000 \times 4} \\\ \\\Rightarrow R = \frac{700000}{100000} \\\ \\\Rightarrow R = 7\%$$​​

The rate of interest is 7%.