Question

charge 5% interest on capital where as capital is 119400

Answer 1

5970 interest will be charged

Answer 2

Interest on Capital = 5,970

Explanation:

Given:

Capital during the year = 119,400

Rate of interest on capital = 5% = 5 / 100 = 0.05

Interest on Capital = ?

Note: Interest on capital will always charge on opening balance of capital.

Computation of interest on Capital:

Interest on Capital = Capital during the year × Rate of interest on capital

Interest on Capital = 119,400 × 0.05

Interest on Capital = 5,970

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