Read the information given below and select the correct option -
1
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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Answer: Correct answer is C
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