A borrows a sum of Rs. 90,000 for 4 years at 5% simple interest. He lends it to B at 7% for 4 years at simple interest. What is his gain (in Rs.)?

$$\eqalign{ & {\text{A's,}}\,{\text{Principal}} = {\text{Rs}}{\text{. }}90,000 \cr & {\text{Rate}} = 5\% \cr & {\text{Time}} = 4{\text{ years}} \cr & \therefore {\text{S}}{\text{.I}} = \frac{{90,000 \times 5 \times 4}}{{100}} = {\text{Rs}}{\text{. }}18,000 \cr & {\text{B's,}}\,{\text{Principal}} = {\text{Rs}}{\text{. }}90,000 \cr & {\text{Rate}} = 7\% \cr & {\text{Time}} = 4{\text{ years}} \cr & \therefore {\text{S}}{\text{.I}} = \frac{{90,000 \times 7 \times 4}}{{100}} = {\text{Rs}}{\text{. }}25,200 \cr & \therefore {\text{Profit of A}} \cr & = \left( {25,200 - 18,000} \right) = {\text{Rs}}{\text{. }}7,200 \cr} $$