Concept:When partners do not have a written partnership agreement, the provisions of the Partnership Act apply to settle issues such as profit sharing and interest on capital.
Explanation:In the absence of a partnership agreement, partners share profits and losses equally.
No interest is allowed on the regular capital contributed by partners.
However, additional capital introduced by a partner beyond the agreed capital is treated as an advance or loan made to the firm.
The Partnership Act permits interest on this additional contribution at the rate of
5% per annum.
Hence, additional capital contributions attract interest of
5%, not
10%,
12%, or
15%.
Therefore, the correct option is A.
Answer:5% (Option A)