How debts mounted In a petition to the Deccan Riots Commission a ryot explained how the system of loans worked: A sowkar lends his debtor 100 on bond at 3-2 annas per cent per mensem. The latter agrees to pay the amount within eight days from the passing of the bond. Three years after the stipulated time for repaying the amount, the sowkar takes from his debtor another bond for the principal and interest together at the same rate of interest, and allows him 125 days' time to liquidate the debt. After the lapse of 3 years and 15 days a third bond is passed by the debtor ... (this process is repeated) at end of 12 years .... his interest on 1,000 amounts to 2,028-10 annas-3 paise. How did the ryot explain the system of loans?

How debts mounted In a petition to the Deccan Riots Commission a ryot

1.	How debts mounted In a petition to the Deccan Riots Commission a ryot explained how the system of loans worked: A sowkar lends his debtor 100 on bond at 3-2 annas per cent per mensem. The latter agrees to pay the amount within eight days from the passing of the bond. Three years after the stipulated time for repaying the amount, the sowkar takes from his debtor another bond for the principal and interest together at the same rate of interest, and allows him 125 days' time to liquidate the debt. After the lapse of 3 years and 15 days a third bond is passed by the debtor ... (this process is repeated) at end of 12 years .... his interest on 1,000 amounts to 2,028-10 annas-3 paise. How did the ryot explain the system of loans?
Answer» Solution :The sowkar (sahukar) lends his debtor Rs. 100 on bond at Rs. 3-2 annas PERCENT per mensem. The latter agrees to pay the amount within eight DAYS from the passing of the bond. THREE years after the stipulated time for repaying the amount, the sowkar takes from his debtor another bond for the principal and INTEREST together at the same rate of interest, and allows him a period of 125 days to liquidate the debt.After the lapse of 3 years and 15 days, a third bond is passed by the debtor. This process is repeated at theend of 12 years and his interest on Rs. 1000 amounts to Rs. 2028-10 annas-3 paise