Question

B and M are partners in a firm. They withdrew ₹ 48,000 and ₹ 36,000 respectively during the year evenly in the middle of every month. According to the partnership agreement, interest on drawings is to be charged @ 10% p.a. Calculate interest on drawings of the partners using the appropriate formula.

Answer 1

Interest is calculated as given below.

Explanation:

Amount withdrawn by B in the year dividing evenly in the “middle” of every month = Rs 48000

Amount withdrawn by M in the year dividing evenly in the “middle” of every month = Rs 36000

Interest rate given is 10% per annum.

Time would be six months as amount is withdrawn in the “middle” of every month.

B’s Interest

$= 48,000 \times \frac {10}{100} \times \frac {6}{12} = Rs. 2400$

M’s Interest

$= 36,000 \times \frac {10}{100} \times \frac {6}{12} = Rs. 1800$

Thus, the partner B's interest and M's interest will be Rs. 2400 and Rs. 1800 respectively.