Rahman lent Rs 16000 to Rasheed at the rate of

Given,

$\mathrm{P}=\mathrm{Rs} 16,000$

$\mathrm{R}=12.5 \%$ p. a

$\mathrm{n}=3$ years

We know that amount $\mathrm{A}$ at the end of $\mathrm{n}$ years at the rate $\mathrm{R} \%$ per annum when the interest is compounded annually is given by $\mathrm{A}=\mathrm{P}\left(1+\frac{\mathrm{R}}{100}\right)^{\mathrm{n}}$.

$\therefore \mathrm{A}=16,000\left(1+\frac{12.5}{100}\right)^{3}$

$=16,000(1.125)^{3}$

$=22,781.25$

Thus, the required amount is Rs $22,781.25$.