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Raj and Neeraj are partners in a firm. Their capitals as on April 01, 2005 were Rs. 2,50,000 and Rs. 1,50,000, respectively. They share profits equally. On July 01, 2005, they decided that their capitals should be Rs. 1,00,000 each. The necessary adjustment in the capitals were made by introducing or withdrawing cash by the partners’. Interest on capital is allowed @ 8% p.a. Compute interest on capital for both the partners for the year ending on March 31, 2006

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Interest on capital can be calculated by product method as well as simple method.

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