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Discussion :: Simple Interest

  1. A person borrows Rs. 5000 for 2 years at 4% p.a. simple interest. He immediately lends it to another person at 6\( \frac { 1 } { 4 } \)% p.a for 2 years. Find his gain in the transaction per year.

    2. A.

    Rs. 112.50
    B.

    Rs. 125
    C.

    Rs. 150
    D.

    Rs. 167.50

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    Answer : Option A

    Explanation :

     

    Gain in 2 years
    = Rs. 5000 x \(\frac { 25 } { 4 } \)   x   \(\frac { 25 } {100 }\) - \([\frac { 500*4*2 } {100} ]\)  
         
      = Rs. (625 - 400)
      = Rs. 225.

     

     Gain in 1 year = Rs.[     \(\frac { 225 } { 2 }\)  ] = Rs. 112.50
     

     

     

     

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