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What will be the interest for one year on the retired partner’s loan of ₹2,75,000 at 4.8% per annum?

Answer and explanation

Correct answer: ₹13,200

Interest = Principal × Rate = ₹2,75,000 × 4.8/100 = ₹13,200, so option B is correct. Converting 4.8% to 0.048 before multiplication gives the same result; ₹12,200 may result from calculating the rate incorrectly. Exam tip: convert the percentage into a fraction or decimal before multiplying it by the principal.

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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