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Question
A Ltd. issued 1,000, 10% debentures of ₹ 100 each at a premium of 5%. What will be the total amount of interest for one year?
Options
₹ 10,500
₹ 10,000
₹ 5,250
₹ 5,000
MCQ
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Solution
₹ 10,000
Explanation:
Calculate the total face value of the debentures:
Total face value = Number of debentures × Face value per debenture
Total face value = 1,000 × 100 = 1,00,000
Calculate the annual interest:
Total interest = Total face value × Interest rate
Total interest = 1,00,000 × 10%
= `1,00,000 xx 10/100`
= 10,000
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