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A retired partner’s loan account has a balance of ₹70,000, carrying interest at 6% per annum. What will be the interest for one year?

Answer and explanation

Correct answer: ₹4,200

Interest for one year = ₹70,000 × 6/100 = ₹4,200, so option B is correct. ₹3,500 represents approximately 5% interest, not 6%. Exam tip: multiply the principal balance by the rate and divide by 100 when calculating simple annual interest.

Related tags

Partner Loan AccountRetirement Of PartnerInterest CalculationReconstitution AccountingClass 12 AccountancyPartner's Loan AccountPartner S Loan AccountReconstitution Retirement Or Death Of A Partner

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