A person borrows Rs. 5000 for 2 years at 4% p.a. simple interest. He immediately lends it to another person at 614 p.a for 2 years. Find his gain in the transaction per year

Q: A person borrows Rs. 5000 for 2 years at 4% p.a. simple interest. He immediately lends it to another person at 614 p.a for 2 years. Find his gain in the transaction per year

g a i n i n 2 y e a r s = R s . 5000 * 25 4 * 2 100 - 5000 * 4 * 2 100 = Rs. (625 - 400) = Rs. 225 g a i n i n 1 y e a r = R s . 225 2 = 112 . 50

Rs. 112.50
Rs.150.25
Rs.167.50
Rs.170

Correct Answer: Rs. 112.50

Explanation:

$g a i n i n 2 y e a r s = R s . 5000 * \frac{25}{4} * \frac{2}{100} - \frac{5000 * 4 * 2}{100}$

= Rs. (625 - 400)

= Rs. 225

$g a i n i n 1 y e a r = R s . \frac{225}{2} = 112.50$

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