a person borrow ₹ 5000 for 2 years at 4% p.a. simple interest. he lends to it to another person at 25/4% p.a. for 2 years. find his gain in the transaction per year? it is related to simple interest
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P = 5000
T = 2 yr
R = 4%
He has to pay an interest of
SI = PTR/100 = 5000×2×4/100 = ₹400
He lends it to another person.
P = 5000
T = 2 yr
R = 25/4 %
He will get an interest of
SI = PTR/100 = 5000×2×(25/4)/100 = ₹625
His gain = ₹625 - ₹400 = ₹225
Gain per year = 225/2 = ₹112.50
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