Study the chart and answer the questions If on an average, 20% rate of…
2026
Study the chart and answer the questions
If on an average, 20% rate of interest was charged on borrowed funds, then the total borrowed funds used by this company is the given 2 yr amounted to
Answer: D. Rs 515 lakh — Key idea: the total interest expense over the two years equals 20% of the borrowed funds. Compute total interest from the charts, then divide by 0.20 to get…
- A.
Rs 221 lakh
- B.
Rs 195 lakh
- C.
Rs 368 lakh
- D.
Rs 515 lakh
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Correct answer: D
Key idea: the total interest expense over the two years equals 20% of the borrowed funds. Compute total interest from the charts, then divide by 0.20 to get borrowed funds.
Interest for 1990–91 = 30% of Rs 130 lakh = Rs 39 lakh.
Interest for 1991–92 = 40% of Rs 160 lakh = Rs 64 lakh.
Total interest = Rs 39 lakh + Rs 64 lakh = Rs 103 lakh.
Borrowed funds = Total interest ÷ 0.20 = 103 ÷ 0.20 = Rs 515 lakh.
Answer: Rs 515 lakh