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Question
If rent is paid against land, then which of the following is paid against credit?
If rent is paid against land, then which of the following is paid against credit?
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Solution
The correct option is D Interest
Interest is the amount paid against a loan. In the above anaolgy, we have to pay interest to borrow money just as we have to pay the rent to use land. Interest rates vary between the formal and informal sectors of credit. Interest rates are much higher in case of the informal sector.
Interest is the amount paid against a loan. In the above anaolgy, we have to pay interest to borrow money just as we have to pay the rent to use land. Interest rates vary between the formal and informal sectors of credit. Interest rates are much higher in case of the informal sector.
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