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As capital is Rs 90000 and interest on capital rate is twelve percent. What will be the interest amount?

Answer and explanation

Correct answer: Rs 10800

Direct answer: Option A, Rs 10,800. Interest on capital is calculated by multiplying capital by the given rate: \\(90,000 \\times \\frac{12}{100}=10,800\\). Thus the interest allowed to A is Rs 10,800, assuming the stated capital and rate apply for the full relevant period and no partnership-agreement restriction is intended. Option A is correct because it is exactly twelve percent of Rs 90,000. Option B, Rs 9,000, equals ten percent of the capital, not twelve percent. Option C, Rs 12,000, would be higher than the required calculation and does not equal twelve percent of Rs 90,000. Option D, Rs 7,800, is also not the result of the stated rate. Always convert the percentage to \\(12/100\\), multiply by capital, and check the units are rupees.

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