If the SI on Rs. 1500 is Rs. 150 for 3 years, what is the rate of interest?

Concept: Simple Interest (SI) grows linearly with time and is given by SI = (P x R x T) / 100, where P is the principal, R is the rate of interest per annum, and T is the time in years. To find the rate when SI, P and T are known, this formula is rearranged to R = (SI x 100) / (P x T).

Application: Here, SI = Rs. 150, P = Rs. 1500, and T = 3 years. Substituting into the rearranged formula:

1. Write the rearranged formula: R = (SI x 100) / (P x T).

2. Substitute the values: R = (150 x 100) / (1500 x 3).

3. Simplify the numerator and denominator: R = 15000 / 4500.

4. Divide to get the rate: R is approximately 3.33% per annum.

Cross-check: Substituting R = 3.33% back into the original formula gives SI = (1500 x 3.33 x 3) / 100, which is approximately 149.85, rounding to the given Rs. 150 and confirming the rate.