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Social Science (087) — CBSE Class 10 board question

Q1. [1] § NOTES FOR THE TEACHER § TERMS OF CREDIT § Variety of Credit Arrangements
Look at the given picture carefully and infer the income of the bank. Choose the correct option from the following.
  1. (a) The difference between the amount deposited and borrowed by the bank to Reserve Bank of India.
  2. (b) The difference of amount of interest between what is charged from borrowers and what is paid to depositors.
  3. (c) The difference of interest rate between what is charged from borrowers and what is charged from depositor.
  4. (d) The difference between the amount deposited by the depositor and borrowed by the borrower.
Previously asked in CBSE board exam
2024 32/1/1 Q20
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Generated by claude-sonnet-4-6 · 2026-06-15 06:55 · grounding rag
Model Answer

(b) The difference of amount of interest between what is charged from borrowers and what is paid to depositors.

Banks charge a higher interest rate on loans than what they offer on deposits; this difference is their main source of income.

Source: Money and Credit, Chapter 3, Loan Activities of Banks

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Explanation

The passage explicitly states: "Banks charge a higher interest rate on loans than what they offer on deposits. The difference between what is charged from borrowers and what is paid to depositors is their main source of income." Option (b) captures this exactly. Options (c) and (d) confuse "interest rate" with "interest amount" or talk about principal amounts — both are incorrect as per the text.

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