Question

4. Naveen and Praveen entered into a joint venture to construct a building for
respectively. They agreed to share profits and losses in the ratio of 3:2
It was decided that the work would be looked after by Naveen, who would
be paid 10% commission on contract price in addition to his share of profits.
Naveen bought the necessary materials for * 6,00,000 and paid 18,000 for
expenses. He also contributed building materials from his own stock worth
737,500. There was an outstanding wages of 9,000.
The building was completed and the contract money was duly received.
Praveen took over the stock of materials at an agreed value of 30,000 and
outstanding wages were paid by Naveen.
Prepare Joint Venture A/c and Praveen's A/c in the books of Naveen.

Answer 1

Explanation:

Let r be the rate of interest.

Given that Naveen borrowed Rs.42000 and Praveen borrowed Rs.55000.

Time period =

2

7

years

As we know that,

S.I.=

100

P×r×t

Here,

S.I.= Simple interest

P= Principal sum

r= Rate of interest

t= Time period

Therefore,

S.I. paid by Naveen =

100

42000×r×(

2

7

)

=210×r×7

S.I. paid by Praveen =

100

55000×r×(

2

7

)

=225×r×7

Given that the difference in the interest paid by Praveen and Naveen is Rs.3640

Therefore,

225×r×7−210×r×7=3640

r×7×(275−210)=3640

⇒r=

7×65

3640

=8%

Hence the rate of interest is 8%.

Hence the correct answer is 8%.