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What will be the one-year interest on ₹112000 credited to a retiring partner’s loan account at 8.5% per annum?

Answer and explanation

Correct answer: ₹9520

Interest = Principal × Rate = ₹112000 × 8.5/100 = ₹9520. Therefore, option B is correct. The same result is obtained by multiplying ₹112000 by 0.085. In examinations, remember to divide the percentage rate by 100; amounts such as ₹10520 and ₹11520 result from using an incorrect rate or calculation.

Related tags

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

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