Explanation:

- Sandeep buys the toy car for Rs500.

- He sells it for Rs625.

- To calculate the gain percentage:

- Gain = Selling Price - Cost Price = Rs625 - Rs500 = Rs125.

- Gain Percentage = (Gain / Cost Price) * 100.

- Gain Percentage = (Rs125 / Rs500) * 100 = 25%.

- Now, evaluate the options:

- Option 1: 20% gain - Incorrect, as the calculated gain is 25%.

- Option 2: 20% loss - Incorrect, because there is a gain, not a loss.

- Option 3: 25% gain - Correct, matching the calculated gain.

- Option 4: 25% loss - Incorrect, as there is a gain.

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