ABC26GN4007 · Simple Interest

Subject: General Aptitude · Chapter: Simple Interest · Exam: 2005 · Marks: · Difficulty:

A person borrows ₹ 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.
(a)₹ 112.50
(b)₹ 125
(c)₹ 150
(d)₹ 167.50
Answer
Answer (as printed): A
Explanation
$$\begin{aligned} \text { Gain in 2yrs } & =\left[\left(5000 \times \frac{25}{4} \times \frac{2}{100}\right)-\left(\frac{5000 \times 4 \times 2}{100}\right)\right] \\ & =₹(625-400)=₹ 225 . \end{aligned}$$

Explanation as extracted from the printed page; notation may be imperfect.

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