How it is 108000 and 84000
Dear Student
In this question, we can see that there are Addition and Withdrawal of Capital on 01-Oct, therefore Interest on capital would be calculated after adjusting the effect of Addition or Withdrawal of capital.
It shall be calculated as follows :
*Negative amount here represents Withdrawal of Capital.
Regards
In this question, we can see that there are Addition and Withdrawal of Capital on 01-Oct, therefore Interest on capital would be calculated after adjusting the effect of Addition or Withdrawal of capital.
It shall be calculated as follows :
Calculation of Interest on Capital - A | |||
Date | Amount | No. of Months to 31-3-18 | Interest @ 8% |
1-Apr-17 | 1,500,000 | 12 | 120,000 |
1-Oct-17 | (300,000) | 6 | (12,000) |
Total | 1,200,000 | 108,000 |
*Negative amount here represents Withdrawal of Capital.
Calculation of Interest on Capital - B | |||
Date | Amount | No. of Months to 31-3-18 | Interest @ 8% |
1-Apr-17 | 900,000 | 12 | 72,000 |
1-Oct-17 | 300,000 | 6 | 12,000 |
Total | 1,200,000 | 84,000 |
Regards