Sara and Tara were partners in a firm. Their capitals as on 1st April, 2023 were ₹ 6,00,000 and ₹ 4,00,000 respectively. On 1st October, 2023, Tara withdrew ₹ 1,00,000 for personal use. According to the partnership deed, interest on capital was allowed @ 8% p.a.
The amount of interest allowed on Tara's capital for the year ended 31st March, 2024 was:
Sara and Tara were partners in a firm. Their capitals as on 1st April, 2023 were ₹ 6,00,000 and ₹ 4,00,000 respectively. On 1st October, 2023, Tara withdrew ₹ 1,00,000 for personal use. According to the partnership deed, interest on capital was allowed @ 8% p.a.
The amount of interest allowed on Tara's capital for the year ended 31st March, 2024 was:
Show Hint
- ₹ 28,000
- ₹ 30,000
- ₹ 48,000
- ₹ 32,000
The Correct Option is A
Solution and Explanation
Step 1: Calculate interest on full capital for the first six months.
At the start of the year, Tara's capital was ₹ 4,00,000. Since she withdrew ₹ 1,00,000 on 1st October, interest for the first six months (April to September) will be calculated on the full amount of ₹ 4,00,000:
\[\text{Interest} = \frac{4,00,000 \times 8 \times 6}{100 \times 12} = ₹ 16,000 \]
Step 2: Calculate interest for the next six months on reduced capital.
After the withdrawal of ₹ 1,00,000, Tara's capital reduces to ₹ 3,00,000. Therefore, for the remaining six months (October to March), interest will be calculated on ₹ 3,00,000:
\[\text{Interest} = \frac{3,00,000 \times 8 \times 6}{100 \times 12} = ₹ 12,000 \]
Step 3: Add the interest from both periods to find the total.
\[\text{Total Interest} = ₹ 16,000 + ₹ 12,000 = ₹ 28,000 \]
Hence, the total interest allowed on Tara's capital for the year is ₹ 28,000.
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