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A balance of ₹1,40,000 is due in a partner’s loan account. After adding 5% interest, ₹50,000 is paid. What will be the final balance in the loan account after the payment?

Answer and explanation

Correct answer: ₹97,000

Interest on ₹1,40,000 at 5% is ₹7,000. Therefore, the total amount due before payment is ₹1,47,000. After paying ₹50,000, the final balance is ₹1,47,000 − ₹50,000 = ₹97,000. Option C is the amount due before payment, not the final balance. Exam tip: Add the interest first and then subtract the amount paid.

Related tags

Partners Loan AccountInterest CalculationLoan RepaymentPartnership AccountsPartner's Loan AccountPartner S Loan AccountReconstitution Retirement Or Death Of A PartnerAccountancy

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