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What is interest on Capital?
Interest on capital refers to the interest received from the capital that you have invested in. The concept is actually pretty simple but the complication arises when the investors are more than one and when the interest is to be shared in accordance with the percentage of investment by each investor.
If a particular investor has 50% investment and the rest three investors have the other 50% investment, then the interest received on the capital will be divided such that 50% of the interest is taken by the investor investing 50% of the investment and the rest will be divided equally between the other three. The chapter is very scoring if you get Interest on capital Assignment help.
What are the terms of interest on capital?
There are certain terms and clauses that one has to take care of before sharing the interest only in accordance with the initial investment of every investor. They are:
- If the business reaches such a stage where, for the future of the business, more contribution is required and one person pays more or less than the other, the interest received by them will increase or decrease accordingly.
- Be it profit or loss, both has to be borne by the investors in respect to the percentage of their initial investment. The more the profit, the more the bigger investor receives and the more the loss, the more the bigger investor suffers.
Things to be kept in mind before studying Interest on Capital
Out of the many things that one has to keep in mind before studying interest on capital, the most important thing is to jot down the investment of each investor in detail including the investment made after the initial agreement. This way, the investors reach a mutual agreement.
Another important thing to be kept in mind is that be it profit or loss, both has to be borne with the same patience and sincerity by the investors. This way, the business will have more scope of having a better and brighter future. However, you will need Interest on Capital Assignment help.
The problems revolving around Interest on capital are as follows:
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