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: Understanding the Concept:
Interest on capital is charged on the balance of capital for the time it was held. When capital is added or withdrawn during the year, we work out interest separately for each period. The financial year runs from April 1, 2024 to March 31, 2025, which is 12 months.

Step 2: Key Formula:
\[ \text{Interest} = \text{Amount} \times \frac{\text{Rate}}{100} \times \frac{\text{Months}}{12} \]

Step 3: Interest on opening capital:
Opening capital is Rs 2,00,000 for the full 12 months. \[ 200000 \times \frac{8}{100} = 16000 \]

Step 4: Interest on additional capital:
Rs 50,000 was added on July 1, 2024. It stays till March 31, 2025, which is 9 months. \[ 50000 \times \frac{8}{100} \times \frac{9}{12} = 3000 \] This interest is added.

Step 5: Interest lost on withdrawal:
Rs 30,000 was withdrawn on October 1, 2024. It is missing for the last 6 months. \[ 30000 \times \frac{8}{100} \times \frac{6}{12} = 1200 \] This interest is deducted.

Step 6: Total interest:
\[ 16000 + 3000 - 1200 = 17800 \] The other options come from mistakes. Rs 16,000 ignores the changes in capital. Rs 24,000 and Rs 25,800 use wrong balances or periods.

Final Answer:
Interest payable to Radha is Rs 17,800. Option (3). \[ \boxed{\text{Rs } 17{,}800} \]