Final answer:
Simple interest is calculated using the formula: Simple Interest = Principal × Rate × Time. For example, if the sum of money is $100, the simple interest would be $15.
Step-by-step explanation:
Simple interest is calculated using the formula:
Simple Interest = Principal × Rate × Time
In this case, the principal is the sum of money, the rate is 12.5% (or 12.5/100 = 0.125), and the time is 3 years. Plugging in these values, we get:
Simple Interest = Sum of Money × 0.125 × 3
For example, if the sum of money is $100, the simple interest would be $100 × 0.125 × 3 = $15. Therefore, the simple interest on a sum of money for 3 years at 12 1/2 percent per annum is $15.