Based on following, answer the question.

Mr. A, Mr. B and Mrs. C are friends, graduated from JIM Calcutta with specialisation in finance. They started a financing business as a partnership firm. In a written Partnership Deed they specify that the profit sharing ratio amongst them would be 3 : 2 : 1 and interest of capital would be provided @ 5% p.a. However no specifications were made in partnership deed about the interest on drawings and loans. The capitals contributed by them were 3,00,000, 2,00,000 and 1,00,000 by A, B and C respectively. During the year Mrs. C withdrew 20,000 to meet her family expenses. Looking at insufficient capital Mr. B introduced another 1,00,000 as capital into the firm on 1^st June 2021. The business was expanding and for the same purpose the firm took a loan from Mr. A of 3,00,000 on 1^st October 2021. During the year ended 31 March, 2022 firm earned a profit of 4,00,000 before charging rent of 20,000 p.a. Looking at the competency of Mr. D being a C.A. Mr. B wanted to introduce him in the partnership firm as a partner. The firm started its operation on 1^st April 2021.

The partnership deed provides for Interest on capital @ 5% p.a. What would be the amount of interest on capital credited to Mrs. C?

₹5,000

The correct answer is Option (3) - ₹5,000.

C's capital = ₹100000
Interest on capital @ 5% p.a.
Interest = 100000 x 5/100
            = ₹5000