A partner has been withdrawing Rs 600 at the end of each month from january to december for private expenses according to the partnership deed interest in charged on drawing @10%per annum calculate the amount of interest to be charged on the partners drawings for the year
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Explanation:
Calculation of interest on drawings:
Number of drawings = 6
Amount of each drawing= 4000
Total drawings= 6*4000
= 24000
Number of months= [Time left after 1st drawing + Time left after last drawing]/2
= [6+1]/2
= 3.5 months
Hence,
Interest on drawings= 24000 * 5/100 * 3.5/12
= 350
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