What will be the interest on debentures for the year ended 31st March 2022, if 800 debentures are issued of ₹100 each at a discount of 5% with an interest rate of 8% at the beginning of the year?

₹6,400

The correct answer is option 2- ₹6,400.

Debentures = 800 X100
                   = ₹80,000

Interest is paid on nominal value.

Interest = 80,000 X 8/100
              = ₹6,400