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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.

/ Aptitude, Simple Interest / By
Question: 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

Video Explanation: https://youtu.be/zBjcwqIcmL4