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Under sections 63 and 63A of the Transfer of Property Act, 1882, what rate of interest applies to…

Sections 63 and 63A(2) apply the interest rate payable on the mortgage principal to qualifying accession or improvement costs that the mortgagor must reimburse as an…

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Under sections 63 and 63A of the Transfer of Property Act, 1882, what rate of interest applies to qualifying accession or improvement costs added to the mortgage principal when no interest rate is fixed on the principal?

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Answer and explanation

Correct answer C

Sections 63 and 63A(2) apply the interest rate payable on the mortgage principal to qualifying accession or improvement costs that the mortgagor must reimburse as an addition to principal. If no such rate is fixed, the statutory rate is 9% per annum.

Option feedback

Option A

Incorrect. 6% per annum is not the default interest rate prescribed under Sections 63 and 63A of the Transfer of Property Act, 1882.

Option B

Incorrect. 8% per annum is not the default interest rate prescribed under Sections 63 and 63A of the Transfer of Property Act, 1882.

Option C

Qualifying accession or improvement costs that must be added to principal carry 9% annual interest when no interest rate is fixed on the principal.

Option D

Incorrect. 12% per annum is not the default interest rate prescribed under Sections 63 and 63A of the Transfer of Property Act, 1882.

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