Question

A partner withdraws from firm Rs.14,000 at the end of each month. At the rate of 8% p.a. total interest will be

Answer 1

Answer:

Rs. 275

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

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2

= 11 + 0

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2

= 5.5