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What will be the annual interest on ₹3,50,000 in a partner’s loan account at 3.5% per annum?

Answer and explanation

Correct answer: ₹12,250

Interest = Principal × Rate = ₹3,50,000 × \(\frac{3.5}{100}\) = ₹12,250. Therefore, option C is correct. The amounts ₹11,250 and ₹13,250 do not result from applying 3.5% correctly. Exam tip: Convert the percentage into a decimal or \(\frac{rate}{100}\) before multiplying.

Related tags

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

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