A person borrows Rs.5000 for 2 years at 4% p.a. simple interest. He immediately lends it to another person at 8% p.a for 2 years. Find his gain in the transaction per year.
Pick:
A) 167.5 B) 150 C) 200 D) 112.5 E) 212.5

Rationale: explanation : the person borrows rs . 5000 for 2 years at 4 % p . a . simple interest simple interest that he needs to pay = prt / 100 = 5000 × 4 × 2 / 100 = 400 he also lends it at 8 % p . a for 2 years simple interest that he gets = prt / 100 = 5000 × 8 × 2 / 100 = 800 his overall gain in 2 years = rs . 800 - rs . 400 = rs . 400 his overall gain in 1 year = 400 / 2 = rs . 200 answer : option c
Answer: C