If the radius of a circle is increased by 25%, then area of the circle will increase by

25%
37.50%
50%
56.25%

The correct answer is (b) 37.5%.

The area of a circle is given by the formula $A = \pi r^2$, where $r$ is the radius of the circle. If the radius is increased by 25%, then the new radius is $r + 0.25r = 1.25r$. The new area is $A = \pi (1.25r)^2 = 1.5625 \pi r^2$, which is an increase of 37.5%.

Option (a) is incorrect because the area of the circle does not increase by 25% when the radius is increased by 25%. The area increases by 37.5%.

Option (c) is incorrect because the area of the circle does not increase by 50% when the radius is increased by 25%. The area increases by 37.5%.

Option (d) is incorrect because the area of the circle does not increase by 56.25% when the radius is increased by 25%. The area increases by 37.5%.