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A's capital is Rs 100000 and the annual interest on capital is 10%. What is the interest on capital for the year?

Answer and explanation

Correct answer: Rs 10000

Use the formula: \(\text{Interest} = \text{Capital} \times \text{Rate}\). Here Capital = Rs 100000 and Rate = 10%, so \(100000 \times 10\% = 10000\). Therefore the interest for the year is Rs 10000. Option C (Rs 11000) would correspond to an 11% rate and is incorrect; option B (Rs 9000) corresponds to 9% and is also wrong. Exam tip: convert percent to decimal (10% = 0.10) and multiply to avoid calculation mistakes.

Related tags

Interest On CapitalNumericalCapital AccountPartnership AccountsPercentageCapital AccountsPartnership Accounts Basic ConceptsAccountancy

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