Saloni and Srishti are partners in a firm. Their capital accounts as on April 01. 2019 showed a balance of Rs. 2,00,000 and Rs. 3,00,000 respectively. On July 01, 2019, Saloni introduced additional capital of Rs. 50,000 and Srishti, Rs. 60,000. On October 01, 2019 Saloni withdrew Rs. 30,000 and on January 01, 2020 Srishti withdrew Rs. 15,000 from their respective capitals. Interest is allowed @ 8% p.a. Calculate interest payable on capital to Saloni during the financial year 2019-2020.

Rs. 17,800

The correct answer is Option (2) → Rs. 17,800

• Capital on April 1, 2019 = ₹2,00,000

• Additional capital on July 1, 2019 = ₹50,000

• Withdrawal from capital on October 1, 2019 = ₹30,000

• Interest rate = 8% p.a.

• Financial year = April 1, 2019 to March 31, 2020 (12 months)

Calculate interest for the original capital ₹2,00,000: Saloni kept this for the entire year (12 months).

Interest=2,00,000×8/100×12/ 12 = ₹16,000

Calculate interest on additional capital ₹50,000 :Introduced on July 1, 2019, so it remained invested for 9 months (July–March).

Interest= 50,000 * 8/100 * 9/12 = ₹3,000

Adjust withdrawal on October 1, 2019 (₹30,000): She withdrew this amount, so it was present for 6 months (April–September).

Interest reduction=30,000 *  8/100 * 6/12 = ₹1,200

Total interest on capital = ₹16,000+₹3,000−₹1,200= ₹17,800