A person borrows Rs. 5000 for 2 years at 4% p.a. simple interest. He immediately lends it to another person at 6$ \dfrac{1}{4} $ p.a for 2 years. Find his gain in the transaction per year.
Rs. 112.50
Rs. 125
Rs. 150
Rs. 167.50
Explanation:
Gain in 2 years = Rs.$ \left(\left(5000 \times\dfrac{25}{4} \times\dfrac{2}{100} \right)-\left(\dfrac{5000 \times 4 \times 2}{100} \right)\right) $
= Rs. $\left(625 - 400\right)$
= Rs. 225.
$\therefore$ Gain in 1 year = Rs.$ \left(\dfrac{225}{2} \right) $= Rs. 112.50