A commercial Bank, facing a temporary liquidity crunch, approaches to Bangladesh Bank and borrows Tk. 500 crore through repo at 6.25% for 7 days. Compute the repo interest payable.

Suppose the interest rate of a taxable corporate bond is 12.5% and the marginal tax rate is 40%. A tax-free municipal bond with a rate of 9-25% is also available to buy. Which security would you choose to buy? Why?