Question:
Dove Ltd. issued 8,000, 11% debentures of rupee 100 each at a premium of 5%.The total amount of interest on Debentures for one year will be:
Dove Ltd. issued 8,000, 11% debentures of rupee 100 each at a premium of 5%.The total amount of interest on Debentures for one year will be:
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To calculate the total interest on debentures, multiply the face value of the debentures by the interest rate, ignoring any premium or discount.
Updated On: Feb 5, 2025
- rupee 80,000
- rupee 92,400
- rupee 88,000
- rupee 880
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The Correct Option is C
Solution and Explanation
The total debentures issued = 8,000 debentures of rupee 100 each.
The interest rate = 11%. \[ \text{Total Interest} = \text{Total Value of Debentures} \times \text{Interest Rate} \] \[ \text{Total Interest} = rupee (8,000 \times 100) \times \frac{11}{100} = rupee 88,000 \]
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