A person borrows Rs. 5000 for 2 years at 4% p.a. simple interest. He immediately lends it to another person at 6% p.a for 2 years. Find his gain in the transaction per year.

1.

A person borrows Rs. 5000 for 2 years at 4% p.a. simple interest. He immediately lends it to another person at 6% p.a for 2 years. Find his gain in the transaction per year.

[A].	Rs. 112.50
[B].	Rs. 125
[C].	Rs. 225
[D].	Rs. 167.50

Answer: Option A

Explanation:

Gain in 2 years

= Rs.			5000 x	25	x	2		-		5000 x 4 x 2
				4		100				100

= Rs. (625 - 400)

= Rs. 225.

Gain in 1 year = Rs.		225		= Rs. 112.50
		2

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