On 1 January 2016, C Ltd lent 200,000 to D Ltd at an annual interest rate of

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On 1 January 2016, C Ltd lent £200,000 to D Ltd at an annual interest rate of 8%. No interest was paid until 31 December 2017, when the loan was repaid in full together with two years' interest (which was not compounded). The index of general prices was 100.0 on 1 January 2016 and was 112.0 on 31 December 2017. In terms of general purchasing power, calculate the overall gain made by C Ltd with respect to this loan.

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