A person borrows Rs.5000 for 2 years at 5% 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. Choose the most appropriate option.
A) 62.5  B) 150  C) 225  D) 112.5  E) 212.5
Explanation :   The person borrows Rs. 5000 for 2 years at 5% p.a. simple interest   Simple interest that he needs to pay = PRT/100=5000×5×2/100=500   He also lends it at 6 1⁄4% p.a for 2 years   Simple interest that he gets = PRT/100=5000×25/4×2/100=625   His overall gain in 2 years = Rs.625 - Rs.500 = Rs.125   His overall gain in 1 year = 125/2 = Rs.62.5   62.5nswer : Option 62.5
<result>A</result>
A person borrows Rs.5000 for 2 years at 5% 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.