Ajay borrowed Rs 4225 from Amar. At the end of four years Ajay had to pay back Rs 6253. What was the rate of interest?

The correct answer is: 12%

Complete step by step solution:
We know the formula for total amount = A = P + SI…(i)
where  is the total amount,  is the principal amount and  is simple interest.
Money borrowed by Ajay from Amar = P = 4225 Rs
Money Ajay had to pay after 4 years = A = 6253 Rs
Here, we have P = 4225 and A = 6253.
On substituting the known values in (i), we get 6253 = 4225 + SI

We calculate simple interest by the formula,…(ii)
where P is Principal amount, T is number of years and R is rate of interest
Here, we have SI = 2028, P = 4225, T = 4 and R = ?
On substituting the known values in (i), we get 

Hence the rate of interest R was 12%.