Manju borrows Rs 5000 for 2 years at 4 p a simple interest from Sudha She immediately lends it to an...........

Quant (SSC) Simple Interest

Manju borrows Rs.5000 for 2 years at 4% p.a. simple interest from Sudha. She immediately lends it to another person at 6 1⁄4% p.a for 2 years. Find her gain in the transaction per year.

Rs. 101

Rs. 98.5

Rs. 124.3

Rs. 112.5

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Explanation:

Manju borrows Rs. 5000 for 2 years at 4% p.a. simple interest
She also lends it at 6 1⁄4% p.a for 2 years
=> Total Gain = 6 1/4% − 4% = 2 1/4%
So her gain in the transaction for 1 year
= The simple interest she gets for Rs.5000 for 1 year at 2 1⁄4% per annum
= PTR/100=5000×9/4×1/100 = Rs. 112.5/ year.