Read the following information and answer the questions :

A and B entered into partnership to supply stationery items without any terms and conditions. A contributed ₹ 1,00,000 as capital while B contributed 20,000 only but he allow his building to be used as the firm office. After running business for nearly nine months they felt urgency of funds and same was fulfilled by B by providing ₹ 80,000 as loan to the firm. At the end of the accounting year, they made a profit of ₹50,000. They decide to expand their business in future by admitting C into the firm and also to make agreement in writing containing all the terms and conditions. 

Select the amount that will be paid to B as interest on loan.

₹1,200

The correct answer is Option 3- 1200.

B provide loan of 80000.

No agreement means interest will be charged @6% p.a. Interest will be charged for 3 months because loan is provided for 3 months.
Interest on B's loan = 80000 x 6/100 x 3/12
                             = 1200