Amit and Bramit started business on 1st April, 2018 with capitals of ₹ 15,00,000 and ₹ 9,00,000 respectively. On 1st October, 2018, they decided that their capitals should be ₹ 12,00,000 each. The necessary adjustments in capitals were made by introducing or withdrawing by cheque. Interest on capital is allowed @ 8% p.a. Compute interest on capital for the year ended 31st March, 2019.

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Solution

Calculation of Interest on Amit’s Capital

Date

Capital

×

Period

=

Product

April 01, 2018 to Sept. 30, 2018

15,00,000

×

6

=

90,00,000

Oct. 01, 2018 to March 31, 2019

12,00,000

×

6

=

72,00,000

Sum of Product

1,62,00,000

Calculation of Interest on Bramit’s Capital

Date

Capital

×

Period

=

Product

April 01, 2018 to Sept. 30, 2018

9,00,000

×

6

=

54,00,000

Oct. 01, 2018 to March 31, 2019

12,00,000

×

6

=

72,00,000

Sum of Product

1,26,00,000

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Date	Capital	×	Period	=	Product
April 01, 2018 to Sept. 30, 2018	15,00,000	×	6	=	90,00,000
Oct. 01, 2018 to March 31, 2019	12,00,000	×	6	=	72,00,000
Sum of Product					1,62,00,000