X and Y are partners in a firm and their capital account shows a balance of Rs. 1,00,000 and Rs. 75,000 respectively on April 1, 2024. X introduced additional capital of Rs. 50,000 on August 1, 2024, and Mr. Y introduced further capital of Rs. 75,000 on October 1, 2024. Interest on capital is allowed @6 % annually. Calculate interest payable to Y.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rs. 6,750
When capital changes during the year, interest on capital is worked out on each balance for the period it stayed in the firm. Y's capital was Rs. 75,000 from April 1 and became Rs. 1,50,000 from October 1, 2024; the year ends on March 31, 2025.
On Rs. 75,000 for 6 months (April 1 to September 30): 75,000 × 6% × 6/12 = Rs. 2,250
On Rs. 1,50,000 for 6 months (October 1 to March 31): 1,50,000 × 6% × 6/12 = Rs. 4,500
Interest payable to Y = 2,250 + 4,500 = Rs. 6,750
X's additional capital on August 1 does not enter Y's interest at all.
Note: NTA picked this question from an NCERT (2026-27) illustration and changed the figures. Do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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