A person borrows Tk. 5000 for 2 years at 4% p.a. simple interest. He immediately lends it to another person at 6(1/4)% p.a. for 2 years. Find his gain in the transaction per year.

A Tk. 167.50

B Tk. 150

C Tk. 125

D Tk. 112.50

Correct Answer: Option D

Gain in 2 years=Tk [{5000x(25/4)x(2/100)}-{(5000x4x2)/100}] = Tk. (625 - 400) = Tk. 225

So, Gain in 1 year = Tk. (225/2)=Tk. 112.50