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Asked: 2025-11-09T08:58:04+00:00 In:

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:

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Poll Results

55.56%(a) Increase because of increasing interest and non - payment of monthly amount – ( 10 voters )
5.56%(b) Remain constant - as he is working for the employer but is repaying less – ( 1 voter )
5.56%(c) Reduce as amount equivalent to his salary is being counted as monthly repayment ( 1 voter )
33.33%(d) Be totally repaid - as he is repaying the debt in the form of physical labour ( 6 voters )
Based On 18 Votes

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Option (a) is correct because Mohan’s debt will keep increasing. The landowner charges a high monthly interest of 5% and since Mohan cannot make full payments in cash, his physical labour cannot cover the growing debt completely.

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    1 Answer

    1. The correct answer is (a). Mohan’s debt will increase over time because the landowner charges a high interest rate of 5% per month. Since Mohan repays through labour instead of cash, his repayment does not fully cover the interest. As months pass, unpaid interest keeps adding up, trapping him in a cycle of debt and economic dependency on the landowner.

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