Question

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

Options

• 6% p.a.

• 10% p.a.

• 8% p.a.

• No interest on loan will be paid.

Answer 1

10% p.a.

Explanation:

If a partner lends money to the firm without a specified interest rate arrangement, the Indian Partnership Act, 1932, pays 6% p.a. If the agreement sets a rate (in this case, 10% p.a.), it must be followed. Nisha's loan has a 10% p.a. interest rate, thus the firm must pay it. Therefore, the accountant's 6% p.a. advice is wrong.