Question

Interest on capital will be provided to Aditi and Saurabh in which of the following ratio?

• A. 5:4
• B. 2:1
• C. 1:1
• D. 8:1

Hint:

Always distribute interest on capital in proportion to the partners’ capital balances unless the partnership deed specifies otherwise.

Answer 1

The Correct Option is A

Interest on capital is provided in proportion to the partners’ capitals unless stated otherwise. Aditi’s and Saurabh’s capitals are given as \rupee 5,00,000 and \rupee 4,00,000, respectively. Therefore, the ratio is: \[ \text{Aditi’s Capital : Saurabh’s Capital} = \rupee 5,00,000 : \rupee 4,00,000 = 5:4 \] Conclusion:
The interest on capital will be provided in the ratio \( 5:4 \).