If the agreement clearly gives the interest rate on the loan, which rate will apply?

Correct answer: The rate given in the agreement

The governing concept is that the partnership agreement is the primary basis for determining rights and obligations between partners, including interest on a partner’s loan. When the agreement clearly specifies an interest rate, that exact contractual rate must be applied to the loan balance, so option A is correct. A fixed rate such as 6% or 12% cannot be assumed merely because it is common in some examples; those rates are not universally applicable. Option D is also incorrect because the agreement expressly provides for interest. A general statutory or textbook rate may be relevant only when the agreement is silent, subject to the applicable partnership law and syllabus rule.