Question

Anita and Nikita are partners in a firm sharing profits and losses equally. Nikita has granted a loan of ₹ 60,000 to the firm at 7%. Profit of the firm for the year is ₹2,500. Calculate the amount of interest on loan to be given to Nikita:

[2 marks]

• A. ₹4,200
• B. ₹2,500
• C. ₹1,200
• D. ₹1,500

Answer 1

The correct option is A ₹4,200

Interest on loan is a charge against profit.

Interest = $\frac{₹60,000}{100}\times 7$

= ₹4,200