A person borrows 5000 Rs. For 2 years at 4% per annum simple interest. He immediately lends it to another person at $latex 6\frac{1}{4}\%&s=1$ per annum simple interest for 2 years. His gain in this transaction is :
A person borrows 5000 Rs. For 2 years at 4% per annum simple interest. He immediately lends it to another person at $latex 6\frac{1}{4}\%&s=1$ per annum simple interest for 2 years. His gain in this transaction is :
[A]112.50 Rs.
[B]150 Rs.
[C]225 Rs.
[D]450 Rs.
225 Rs.
Case: I
$latex SI = \frac{5000\times 2\times 4}{100} = 400\ Rs.&s=1$
Case: II
$latex SI = \frac{5000\times 25\times 2}{100\times 4} = 625\ Rs.&s=1$
∴ Gain = (625 – 400) = 225 Rs.
Hence option [C] is correct answer.
