The simple interest on Rs. 625 increases by Rs 25 when the time increases by 2 years. Find the rate of interest per annum.

2% 3% 1% 0.5%

2%

The increase in interest is due to time ⇒ \(\frac{625\;×\;2\;×\;rate}{100}\) = 25 ⇒ rate = 2%