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Sir can you kindly explain me the whole scenario of the question, we have got 80,000 loan for the contract, each year we get some particular amount, but why are we being charged with interest here, who is charging us with interest?
if our creditor is charging us with interest so obviously we will be paying back more than 80,000. So kindly tell me due to what are we being charged with interest.If you borrow money then you will be charged interest by the lender.
The reason for borrowing money is to invest in a project, and the project is earning money.
We need to check that the money earned from the project is enough to repay the loan and to pay the interest.
You should watch the lectures on interest and on investment appraisal.
Sir then do not we need more than 80,000 if we pay with interest? Sir i have already watched the lectures.
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