Calculate interest on the capital of partner Amrita if the opening capital is ₹1,00,000 and the rate of interest is 10% p.a. Amrita brought ₹50,000 on 1 August 2022 and withdrew ₹20,000 on 1st November. Accounts are closed on 31st March, 2023.

₹12,500

The correct answer is option 2- ₹12,500.

Rate of interest is 10% p.a.
Opening Capital is ₹1,00,000.
Interest on opening capital for 7 months upto 1st Nov = 1,00,000 x 10/100 x 7/12
                                                                               = ₹5,833.33

Additional Capital is ₹50,000  which is brought on 1 Aug.
Interest on additional Capital for 3 months from 1 Aug to 1st Nov = 50,000 x 10/100 x 3/12
                                                                                               = ₹1,250

Capital on 1st Nov is after withdrawal of ₹20,000.
 = 1,00,000 + 50,000 - 20,000
 = 1,30,000

Interest on whole capital of ₹1,30,000 from 1st Nov to 31st March.
= 1,30,000 X 10/100 X 5/12
= 5,416.66

So the total interest on capital = 5833.33 + 1250 + 5416.66
                                             = ₹12,499.99 or 12,500