A person borrows Rs.5000 for 2 years at 4% p.a. simple interest. He immediately lends it to another person at 61⁄4% p.a for 2 years. Find his gain in the transaction per year. Pick.
A) 167.5  B) 150  C) 225  D) 112.5  E) 212.5
Explanation :   The person borrows Rs. 5000 for 2 years at 4% p.a. simple interest   Simple interest that he needs to pay = PRT/100=5000×4×2/100=400   He also lends it at 6 1⁄4% p.a for 2 years   Simple interest that he gets = PRT/100=5000×254×21/00=625   His overall gain in 2 years = Rs.625 - Rs.400 = Rs.225   His overall gain in 1 year = 2252 = Rs.112.5   Answer : Option 112.5
<result>D</result>
A person borrows Rs.5000 for 2 years at 4% p.a. simple interest. He immediately lends it to another person at 61⁄4% p.a for 2 years. Find his gain in the transaction per year.