The simple interest on a certain sum of money is $\displaystyle \frac{3}{8}$th of the sum in $\displaystyle 6\frac{1}{4}$ years. Find the rate per cent charged.

Let the principal sum be P, so the simple interest is 3/8 of P. Using the formula Rate equals Simple Interest multiplied by 100 divided by (Principal multiplied by Time), we substitute the known values to get R equals (3/8 of P) times 100 divided by (P times 6.25). The principal P cancels out, leaving R equals 37.5 divided by 6.25. Dividing 37.5 by 6.25 yields a rate of 6%.

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