A person borrows Rs.20000 at the rate of 6 percent per annum on simple interest for 3 years. He immediately lends it to another person at the rate of 8.5 percent per annum on simple interest for 3 years. What is the value of gain per year?

Rs.500

Original rate = 6% , Increased rate = 8.5%

Increment in rate = 8.5 - 6 = 2.5%

Net gain in 3 years with increase in percentage of rate ,

Simple Interest = \(\frac{Principal ×Rate × Time }{100}\)

= \(\frac{20000×2.5 × 3 }{100}\)

= 1500

Gain per year = \(\frac{1500 }{3}\) = Rs. 500