Amir borrowed a sum of Rs. 25,000 on simple interest. Bhola borrowed the same amount on compound interest (interest compounded yearly). At the end of 2 years, Bhola had to pay Rs. 160 more interest than Amir. The rate of interest charged per annum is:
1
8%
2
\(3\frac{1}{8}\% \;\)
3
16/25%
4
8/25%