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What will be the annual interest on ₹1,44,000 in the retiring partner’s loan account at 12.5%?

Answer and explanation

Correct answer: ₹18,000

Annual interest = Principal × Rate = ₹1,44,000 × 12.5/100. Since 12.5% equals 1/8, the interest is ₹1,44,000 ÷ 8 = ₹18,000. Therefore, option C is correct. Exam tip: Converting 12.5% into 1/8 makes the calculation quick and reduces errors.

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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