To compute the simple interest of a loan, you will need to use this formula:
I = Prt
Where I = interest
P = principal
r = interest rate of the loan
t = duration of the loan
In this problem, you are not given of the principal. So, let us just assume the principal to be $100,000.
Substituting the values to the formula:
I = (100,000) (3.25%) (3)
= $9,750 per year
Therefore, for three years you will earn the amount of $29,250 ($9,750 x 3) as interest in 3 years.
If you want to know how much percentage the interest is earned against the principal, you just have to divide the interest with the principal.
RoR = 29,250/100,000 = 29.25% increase in the principal as a result of interest earned
