Question

Kanha, Resham, and Nisha were partners in a firm. Nisha had given a loan of \rupee 1,00,000 to the firm @ 10\% p.a. The accountant of the firm is emphasizing that interest on the loan will be paid @ 6\% p.a. At what rate will the interest on loan be paid to Nisha?

• A. 6\% p.a.
• B. 10\% p.a.
• C. 8\% p.a.
• D. No interest on loan will be paid.

Hint:

Always check the partnership deed or loan agreement for agreed interest rates. If no rate is mentioned, the default rate under the Indian Partnership Act, 1932, is 6\% per annum.

Answer 1

The Correct Option is B

According to the Indian Partnership Act, 1932, if a partner provides a loan to the firm, the interest rate agreed upon between the partner and the firm is applicable. In this case, the agreed rate is \(10\%\) per annum. Therefore, Nisha will be entitled to receive interest at \(10\%\) p.a. If there is no specific agreement regarding the interest rate, the default rate under the Indian Partnership Act, 1932, is \(6\%\) per annum. However, since the rate of \(10\%\) was mutually agreed upon, this rate will be honored. Conclusion:
Interest on Nisha's loan will be paid at \(10\%\) p.a. as per the agreed terms.