A person borrows Rs.5000 for 2 years at 4% p.a. simple interest. He immediately lends it to another person at 7% p.a for 2 years. Find his gain in the transaction per year. Choose the correct choice
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 7% p.a for 2 years   Simple interest that he gets = PRT/100=5000×7×2/100=700   His overall gain in 2 years = Rs.700 - Rs.400 = Rs.300   His overall gain in 1 year = 300/2 = Rs.150   Answer : Option 150
<result>B</result>
A person borrows Rs.5000 for 2 years at 4% p.a. simple interest. He immediately lends it to another person at 7% p.a for 2 years. Find his gain in the transaction per year.