A sum of ₹6,000 amounted to ₹7,500 at a certain rate of simple interest in 5 years. Find the annual rate of interest.

Sure, here is the step by step solution:

Step 1: Understand the problem We know that the principal amount (P) is ₹6,000, the total amount after 5 years (A) is ₹7,500 and the time (T) is 5 years. We need to find the rate of interest (R).

Step 2: Use the formula for simple interest The formula for simple interest is I = PRT/100, where I is the interest, P is the principal amount, R is the rate of interest and T is the time.

Step 3: Calculate the interest The interest (I) is the total amount (A) minus the principal amount (P). So, I = A - P = ₹7,500 - ₹6,000 = ₹1,500.

Step 4: Substitute the values into the formula and solve for R We substitute the values into the formula: ₹1,500 = ₹6,000 * R * 5 / 100. Simplifying this, we get R = ₹1,500 * 100 / (₹6,000 * 5) = 5.

So, the annual rate of interest is 5%.