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After reconstitution, a Partner’s Loan Account carries a balance of ₹60,000 on which interest is payable at 15% per annum. What will be the interest for one year?

Answer and explanation

Correct answer: ₹9,000

Interest for one year = Principal × Rate × Time = ₹60,000 × 15/100 × 1 = ₹9,000. Therefore, option C is correct. The ₹10,000 distractor would result from using a rate higher than 15%. In an exam, when the period is one year, use Principal × Rate directly.

Related tags

Partner Loan AccountInterest CalculationPartnership ReconstitutionRetirement Of PartnerAccountancy Class 12Partner's Loan AccountPartner S Loan AccountReconstitution Retirement Or Death Of A Partner

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