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.

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

=  $\frac{PTR}{100}=\frac{5000\times \frac{9}{4}\times 1}{100}$ = Rs. 112.5/ year.