Simple Interest

Q1: 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

ANS:A - Rs. 112.50

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
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