A person borrows Rs. 5000 for two years at a simple interest rate of 4% per annum. He promptly lends it to another person for two years at 6% p.a. Find his profit in a year's worth of transactions.
A. Rs. 112.50
B. Rs. 125
C. Rs. 225
D. Rs. 167.50
Answer:A
A person borrows Rs. 5000 for two years at a simple interest rate of 4% per annum. He promptly lends it to another person for two years at 6% p.a. Find his profit in a year's worth of transactions.
A. Rs. 112.50 B. Rs. 125 C. Rs. 225 D. Rs. 167.50
Explanation: Gain in two years = Rs.5000 x 25/4x2/100 - 5000 x 4 x 2/100 = Rs. (625 - 400) = Rs. 225.1 year gain = Rs. 225/2 = Rs. 112.50