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A retired partner’s loan account has a balance of ₹1,25,000. Calculate the annual interest at 9.6% for one year.

Answer and explanation

Correct answer: ₹12,000

Interest for one year = Principal × Rate = ₹1,25,000 × 9.6/100 = ₹12,000. Therefore, option C is correct. Since 10% of ₹1,25,000 is ₹12,500, 9.6% is ₹500 less, giving ₹12,000. In exams, convert the percentage to a fraction or decimal before multiplying to avoid calculation errors.

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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