Simple Interest Calculation

Given values:

Amount after 5 years = Rs. 9800

Amount after 8 years = Rs. 12005

Interest for 3 years = Amount after 8 years – Amount after 5 years

= 12005 – 9800

= 2205

Interest for 5 years = 2205 × (5/3)

= 3675

Principal amount = Amount after 5 years – Interest for 5 years

= 9800 – 3675

= 6125

Simple interest formula:

Interest = (P × R × Time) / 100

Rearrange the formula to solve for R:

R = (Interest × 100) / (P × Time)

= (3675 × 100) / (6125 × 5)

= 367500 / 30625

= 12

The rate of interest per annum is 12%.