Fewpal
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Read the information given below and select the correct option - 

Mohan is an agricultural labourer. There are several months in a year when he has no work and needs credit to meet his daily expenses. He depends upon his employer, the landowner for credit who charges an interest rate of 5 per cent per month. Mohan repays the money by working physically for the landowner on his farmland. 

Over the years his debt will – 

A. Increase - because of increasing interest and non-payment of monthly amount 

B. Remain constant - as he is working for the employer but is repaying less 

C. Reduce - as amount equivalent to his salary is being counted as monthly repayment 

D. Be totally repaid - as he is repaying the debt in the form of physical labour

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1 Answer

+1 vote
by (50.2k points)

A. Increase - because of increasing interest and non-payment of monthly amount

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