What is the simple interest on Rs 7,500 at a rate of 10% per annum for a period of 5 years?

Introduction / Context:
This is a basic simple interest computation problem where the principal, rate, and time are directly given. Such questions test your ability to apply the simple interest formula without any extra algebraic manipulation or interpretation tricks.

Given Data / Assumptions:

• Principal, P = Rs 7,500.
• Annual simple interest rate, R = 10% per annum.
• Time period, T = 5 years.
• Interest is simple, not compounded.

Concept / Approach:
The standard simple interest formula is:
SI = (P * R * T) / 100Here, all three values are provided directly, so we only need to plug them into the formula and simplify. The answer required is just the interest amount, not the total amount.

Step-by-Step Solution:
Step 1: Substitute the given values into the formula.SI = (7500 * 10 * 5) / 100Step 2: Compute the numerator.7500 * 10 * 5 = 375,000Step 3: Divide by 100.SI = 375,000 / 100 = Rs 3,750

Verification / Alternative check:
Another way is to first find annual interest and then multiply by the number of years. Annual interest at 10% is (7500 * 10) / 100 = Rs 750. Over 5 years, total interest is 750 * 5 = Rs 3,750, which matches the result from the formula.

Why Other Options Are Wrong:

• Rs 2,750 and Rs 1,750 underestimate the interest and correspond to lower effective rates or shorter durations.
• Rs 750 is just the one year interest and not the 5 year interest.

Common Pitfalls:
Some students mistakenly divide by 10 instead of 100 when applying a percentage, or they misread the time period and compute only 1 year of interest. Writing down the formula clearly and checking that 10% of 7,500 is 750 per year helps prevent such errors.

Final Answer:
The simple interest earned on the amount is Rs 3,750 over 5 years.