Question
An Indian exporter raises a Letter of Credit (LC) worth
USD 1,00,000. The exchange rate on the LC issuance date is ₹83.50/USD. The bank charges 0.25% as commission. What is the commission amount in INR?Solution
LC Value in INR = 1,00,000 × ₹83.50 = ₹83,50,000 Commission = 0.25% of ₹83,50,000 = ₹20,875
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