Simple Interest (SI) for 3 years on Rs. 25,000 is Rs. 7,500. Rate = (SI × 100) / (P × T) = (7500 × 100) / (25000 × 3) = 750000 / 75000 = 10% per annum. For Compound Interest (CI), Amount = P(1 + r/100)³ = 25000(1 + 10/100)³ = 25000(1.1)³ = 25000 × 1.331 = Rs. 33,275. CI = Amount - Principal = 33275 - 25000 = Rs. 8,275. The difference between CI and SI occurs because CI earns interest on accumulated interest, while SI is only on principal. Option A (Rs. 7,750) is close but incorrect. Option B (Rs. 8,500) and D (Rs. 8,250) don't match the calculation.