Ram and Laxman started business on 1st Jan 2020 with a capital of ₹1,20,000 and ₹80,000 respectively. Ram Introduced ₹50,000 to the firm on 1st July 2020 as additional capital. If the rate of interest is 15% p.a. Assuming that accounts are closed as per calender year then the Interest payable to Ram on Capital would be:
Answer & explanation
Correct answer: option 4
The correct answer is option 4- ₹21,750.
Interest rate = 15% p.a.
Ram opening capital (1st Jan) = 1,20,000
Interest = 1,20,000 x 15/100
= 18,000
Additional capital (1st July) = 50,000
Interest = 50,000 x 15/100 x 6/12
= 3,750
Total interest = 18,000 + 3,750
= 21,750