If interest is to be charged on a debit capital balance of Rs 20,000 at 6% per annum for six months, what will be the interest?

Correct answer: Rs 600

This is a simple interest calculation. Use \(I = P \times R \times T\). Here \(P=20,000\), \(R=6\%=0.06\) per annum and time \(T=6/12=\tfrac{1}{2}\) year. So \(I=20,000\times0.06\times\tfrac{1}{2}=600\). Therefore the interest is Rs 600. Option B (Rs 1200) is wrong because it assumes interest for a full year instead of half a year. Exam tip: always convert months into fraction of a year before using \(P\times R\times T\).