Mathematics · Commercial Law and Banking Calculations
A continuing guarantee was given by Mr. Singh for the overdraft facility of a small trader for ₹5,00,000. Over the year, the following transactions occurred: (1) Withdrawal of ₹2,00,000, repaid in full. (2) Withdrawal of ₹4,00,000, repaid in full. (3) Withdrawal of ₹6,00,000. The trader defaults during the third transaction. What is the maximum amount Mr. Singh can be held liable for?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Nil, as the limit was exceeded
- 2₹12,00,000
- 3₹5,00,000✓
- 4₹6,00,000
Correct answer
₹5,00,000
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