Question

23A G
t
16. M, N and O are three partners. They withdrew * 10,000 each on quarterly basis. Compute
interest on drawings for the year 2019 @ 10% p.a. in the following cases :
(i) M withdrew at the beginning of each quarter.
(*) N withdrew at the end of each quarter.
(ii) O withdrew in the middle of each quarter.
(Ans. (i)* 2,500, (ii) 1,500, (iii) 2,000)
the dronins as follows
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Answer 1

Appropriate question:

16. M, N and O are three partners. They withdrew * 10,000 each on quarterly basis. Compute :

interest on drawings for the year 2019 @ 10% p.a. in the following cases :

(i) M withdrew at the beginning of each quarter.

(ii) N withdrew at the end of each quarter.

(ii) O withdrew in the middle of each quarter.

Answer:

Case I (M) - Interest on drawings = ₹ 2500

Case II (N) - Interest on drawings = ₹ 1500

Case III (O) - Interest on drawings = ₹ 2000

Explanation:

Solution :

Total amount of drawings = 10,000 x 4 = ₹ 40,000

Total amount of drawings = ₹ 40,000

Rate of Interest = 10 % p.a.

• Formula used :

Interest on drawings =

$\sf{Total \: amount \: of \: drawings \: \times \: \dfrac{Rate \: of \: interest}{100} \: \times \: \dfrac{Average \: period}{12}}$

Case I :

M withdrew at the beginning of each quarter

If drawings are made at the beginning of each quarter :

Average period = 7.5

Total amount of drawings = ₹ 40,000

$40000 \: \times \: \dfrac{10}{100} \: \times \: \dfrac{7.5}{12}$

⇒ $2500$

Interest on drawings = ₹ 2500

____________________________

Case II :

N withdrew at the end of each quarter.

If drawings are made at the end of every quarter :

Average period = 4.5

Total amount of drawings = ₹ 40,000

$40000 \: \times \: \dfrac{10}{100} \: \times \: \dfrac{4.5}{12}$

⇒ $1500$

Interest on drawings = ₹ 1500

____________________________

Case III :

O withdrew in the middle of each quarter.

If drawings are made in the middle of each quarter :

Average period = 6

Total amount of drawings = ₹ 40,000

$40000 \: \times \: \dfrac{10}{100} \: \times \: \dfrac{6}{12}$

⇒ $2000$

Interest on drawings = ₹ 2000

Therefore,

Interest on drawings =

Case I (M) = ₹ 2500

Case II (N) = ₹ 1500

Case III (O) = ₹ 2000