Question

Read the information given below and select the correct option:- (1)
Meena is a small farmer who takes loan from the moneylender to meet the expenses of cultivation
hoping that her harvest would help repay the loan. The moneylender charges 5 per cent as interest rate
per month. Midway through the season the crop is hit by pests and the crop fails. She is unable to repay
the moneylender and the debt grows over the year into a large amount. Next year, Swapna takes a fresh
loan for cultivation. It is a normal crop this year.

Over the years, her debt will –
A. Decrease - as she is repaying the loan amount through cultivation
B. Remain constant - as she is repaying less due to her second loan
C. Increase - because of increasing interest and non-payment of monthly amount
D. Be totally repaid - as she is repaying the debt because of normal crop production

Answer 1

$\huge\underline{\mathtt{\red{A}\pink{N}\green{S}\blue{W}\purple{E}\orange{R}}}$

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

Answer 2

$\huge\underline\mathbb\pink{AnsWer}{⚡}$

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