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The balance of a partner’s loan account, including interest, is ₹2,18,400, while the original loan was ₹2,10,000. What amount of interest was added to the loan account?

Answer and explanation

Correct answer: ₹8,400

The balance including interest consists of the original principal plus the added interest. Therefore, added interest = ₹2,18,400 − ₹2,10,000 = ₹8,400. Option B results from a place-value error, while option D incorrectly adds the principal instead of finding the excess over it. Exam tip: subtract the original principal from the total amount payable to calculate interest.

Related tags

Partner Loan AccountInterest CalculationReconstitution Of PartnershipReverse CalculationPartner's Loan AccountPartner S Loan AccountReconstitution Retirement Or Death Of A PartnerAccountancy

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