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What will be the annual interest on ₹96,000 in a retiring partner’s loan account at 7.5%?

Answer and explanation

Correct answer: ₹7,200

Annual interest = Principal × Rate = ₹96,000 × 7.5/100 = ₹7,200, so option C is correct. The rate may also be written as 0.075 before multiplication. Exam tip: always convert the percentage into a fraction or decimal before calculating interest.

Related tags

Partner Loan AccountRetirement Of PartnerInterest CalculationPartnership AccountingPartner's Loan AccountPartner S Loan AccountReconstitution Retirement Or Death Of A PartnerAccountancy

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