Question

Radha and Rani are partners in a firm. Their capital accounts as on April 01, 2024 showed a balance of Rs. 2,00,000 and Rs. 3,00,000 respectively. On July 01, 2024, Radha introduced additional capital of Rs. 50,000. On October 01, Radha withdrew Rs. 30,000, from her capital. Interest is allowed @ 8% p.a. Calculate the interest payable to Radha on her capital during the financial year 2024-2025.

• A. Rs 16,000
• B. Rs 24,000
• C. Rs 17,800
• D. Rs 25,800

Hint:

Charge 8% on Rs 2,00,000 for 12 months, add interest on Rs 50,000 for 9 months, and subtract interest on Rs 30,000 for 6 months.

Answer 1

The Correct Option is C

Step 1: Plan:
This time we build the capital balance for each part of the year and charge 8% on each part. We find the sum of "capital times months" and then apply the rate.

Step 2: Split the year:
April to June (3 months): capital = Rs 2,00,000.
July to September (3 months): capital = 2,00,000 + 50,000 = Rs 2,50,000.
October to March (6 months): capital = 2,50,000 - 30,000 = Rs 2,20,000.

Step 3: Product of capital and months:
\[ 200000 \times 3 = 600000 \] \[ 250000 \times 3 = 750000 \] \[ 220000 \times 6 = 1320000 \] Sum: $600000 + 750000 + 1320000 = 2670000$ rupee-months.

Step 4: Convert to interest:
\[ \text{Interest} = 2670000 \times \frac{8}{100} \times \frac{1}{12} = 17800 \]

Final Answer:
Both methods agree. \[ \boxed{\text{Rs } 17{,}800} \]