X, Y and Z are partners in a firm. Their Capitals as on April 1, 2020 were 5,00,000; 4,00,000 and3,00,000 respectively. On July 1, 2020 they introduced further Capitals of 1,00,000; 80,000 and 50,000respectively. On February 1, 2021 Y withdrew 15,000 from his Capital. Interest is to be allowed @ 8%p.a. on the Capitals. Compute interest on Capitals for the year ending March 31, 2021.
Question
X, Y and Z are partners in a firm. Their Capitals as on April 1, 2020 were 5,00,000; 4,00,000 and3,00,000 respectively. On July 1, 2020 they introduced further Capitals of 1,00,000; 80,000 and 50,000respectively. On February 1, 2021 Y withdrew 15,000 from his Capital. Interest is to be allowed @ 8%p.a. on the Capitals. Compute interest on Capitals for the year ending March 31, 2021.
Solution
To calculate the interest on the capitals for the year ending March 31, 2021, we need to consider the time period for which the capitals were invested in the firm. The interest is calculated at 8% per annum.
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For X: Initial capital = 5,00,000 Additional capital introduced on July 1, 2020 = 1,00,000 So, interest for X = (5,00,000 * 8/100 * 12/12) + (1,00,000 * 8/100 * 9/12) = 40,000 + 6,000 = 46,000
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For Y: Initial capital = 4,00,000 Additional capital introduced on July 1, 2020 = 80,000 Capital withdrawn on February 1, 2021 = 15,000 So, interest for Y = (4,00,000 * 8/100 * 12/12) + (80,000 * 8/100 * 9/12) - (15,000 * 8/100 * 2/12) = 32,000 + 4,800 - 200 = 36,600
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For Z: Initial capital = 3,00,000 Additional capital introduced on July 1, 2020 = 50,000 So, interest for Z = (3,00,000 * 8/100 * 12/12) + (50,000 * 8/100 * 9/12) = 24,000 + 3,000 = 27,000
So, the total interest on the capitals for the year ending March 31, 2021 is 46,000 (X) + 36,600 (Y) + 27,000 (Z) = 1,09,600.
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