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A person borrows Rs.5000 for 2 years at 4% p.a. simple interest, lends it at 6.25% p.a. for 2 years. Gain per year:
ARs. 112.50
BRs. 125.50
CRs. 150
DRs. 175
Answer & Solution
Correct answer: A. Rs. 112.50
1. Rate gap = 6.25% − 4% = 2.25% per year.
2. On Rs.5000, yearly gain = 5000 × 2.25/100 = 112.50.
3. Therefore Rs.112.50 per year.
_Source: KMAT Karnataka 2023 PYQ Q.47_