A is Drawing Rs 1,000 p.m on the last day of every month. If the rate of interest is 5% p.a,
then the total interest chargeable from him in the accounting year will be: (1)
a) 325 b) 275
c) 300 d) 350
Answers
Answer:
Interest on drawing = Total drawings x rate of interest x average period/12
= 1,000 x 12 x 5/100 x 5.5/12 (WN 1)
= 12,000 x 5% x 5.5/12
= RS-275.
Working note:-
Average period = Beginning period of use + end period of use
------------------------------------------------------------------
2
= 11 + 0
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2
= 5.5
Explanation:
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Answer:
a) 325
Explanation:
Suppose he is withdrawing every month 1000.
Then he withdrew total 12 times.
S.I = P x R x T / 100
S. I = 1000 x 5 x T /100 = 50 x T
1st withdrew
S.I = 50 x T = 50 x 12/12 = 50 ( 1 yr = 12/12 )
2nd withdrew
S.I = 50 x T = 50 x 11/12 = 45.8
3rd withdrew
S.I = 50 x T = 50 x 10/12 = 41.6
4th withdrew
S.I = 50 x T = 50 x 9/12 = 37.5
5th withdrew
S.I = 50 x T = 50 x 8/12 = 33.3
6th withdrew
S.I = 50 x T = 50 x 7/12 = 29.1
7th withdrew
S.I = 50 x T = 50 x 6/12 = 25
8th withdrew
S.I = 50 x T = 50 x 5/12 = 20.8
9th withdrew
S.I = 50 x T = 50 x 4/12 = 16.6
10th withdrew
S.I = 50 x T = 50 x 3/12 = 12.5
11th withdrew
S.I = 50 x T = 50 x 2/12 = 8.3
12th withdrew
S.I = 50 x T = 50 x 1/12 = 4.1
Total S.I. = SUM OF EACH INTEREST FROM 1st to 12th WITHDREW = 324.6 or 325