Use the information below to answer questions 40 and 41. Keme and Kemi are in partnership sharing profit and losses in the ratio 3:2. Capital - Keme...........

Use the information below to answer questions 40 and 41.

Keme and Kemi are in partnership sharing profit and losses in the ratio 3:2.

Capital - Keme.............₦20 000

........ - Kemi.............₦10 000

Drawings - Keme.............₦2 000

........ - Kemi.............₦3 000

Profit......................₦6 000

Interest on capital.........5%

Interest on drawings........10%

The interest on Kemi's capital is?

Answer Details

The interest on Kemi's capital can be calculated using the formula: Interest on capital = Rate of interest x Capital x Time Here, the rate of interest is 5%, Kemi's capital is ₦10 000, and time is not given. However, we can assume that the time period is one year as it is a common practice in such calculations. So, the interest on Kemi's capital = 0.05 x ₦10 000 x 1 = ₦500 Therefore, the answer is ₦500.