Help needed with an rtp question for ca final fin. reporting

Hi all I am a CA Final student appearing for exam in Nov 12 I have a doubt in a question from Accounting Standard 16 from RTP November 12. Plz have a look at the question no 3 (d) on page 14 of Nov 12 RTP. I am not able to understand the solution given on page 32, especially the interest calculation part. Plz help me with the question. Its really urgent. Thanks & Regards Sumit Poddar +91 99304 64537