Ronald Ross borrows ₹. 5000 for 2 years at 2% p.a. simple interest. Ronald…

Step-by-Step Solution

To calculate Ronald Ross's gain per year, we look at the difference in the interest rates between the money he borrowed and the money he lent.

1. Identify the interest rates:

   • Borrowing rate = 2% p.a.

   • Lending rate = 6 1/4% p.a. = 6.25% p.a.

2. Determine the net interest gain percentage:

   • Since the principal amount is the same (Rs. 5000), Ronald gains the difference between the two rates every year.

   • Net gain rate = 6.25% - 2% = 4.25% per annum.

3. Calculate the gain per year:

   • Gain per year = 4.25% of the principal (Rs. 5000)

   • Gain per year = (4.25 / 100) * 5000

   • Gain per year = 4.25 * 50 = Rs. 212.50.