Question

Calculate Interest on drawings of Ram @ 10%p.a. for the year ended 31st March,2014,if he withdrews rs.2000 per month

CASE 1..IF HE WITHDERW DURING THE MIDDLE OF MONTG

CASE 2..AT THE END OF EVERY MONTH

CASE 3..IN THE BEGINNING OF EVERY MONTH⁸​

Answer 1

SOLUTION :

❒ Given :-

• Amount of Drawings = Rs. 2000 per month

• Rate of interest on Drawings = 10% p.a.

❒ To calculate :-

• Interest on Drawings = ?

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❒ Calculation :-

• ➮ Case 1 : If withdrawn is done during the middle of every month

[If fixed amount are withdrawn on the middle of every month throughout the year, interest on the total amount of drawings is calculated for the average period; i.e., for 6 months ]

Here,

• Total amount of Drawings = (Rs. 2000 × 12) = Rs. 24000

• Period of time = 6 months

• Rate of Interest = 10% p.a.

★ Interest on Drawings = Rs. 24000 × 10% × 6 months

➨ Interest on Drawings = Rs. 24000 × $\sf{\dfrac{10}{100}}$ × $\sf{\dfrac{6}{12}}$

➨ Interest on Drawings = Rs. 24000 × $\sf{\dfrac{1}{10}}$ × $\sf{\dfrac{1}{2}}$

∴ Interest on Drawings = Rs. 1200 ✪

• ✎ Hence, the amount of interest on drawings if Ram withdrawn Rs. 2000 during the middle of every month throughout the year is Rs. 1200.

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• ➮ Case 2 : If withdrawn is done at the end of every month

[If fixed amount are withdrawn at the end of every month throughout the year, interest on the total amount of drawings is calculated for the average period; i.e., for 5 ½ months ]

Here,

• Total amount of Drawings = (Rs. 2000 × 12) = Rs. 24000

• Period of time = 5 ½ months = 5.5 months

• Rate of Interest = 10% p.a.

★ Interest on Drawings = Rs. 24000 × 10% × 5.5 months

➨ Interest on Drawings = Rs. 24000 × $\sf{\dfrac{10}{100}}$ × $\sf{\dfrac{5.5}{12}}$

➨ Interest on Drawings = Rs. 24000 × $\sf{\dfrac{1}{10}}$ × $\sf{\dfrac{5.5}{12}}$

∴ Interest on Drawings = Rs. 1100 ✪

• ✎ Hence, the amount of interest on drawings if Ram withdrawn Rs. 2000 at the end of every month throughout the year is Rs. 1100.

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• ➮ Case 3 : If withdrawn is done at the beginning of every month

[If fixed amount are withdrawn at the beginning of every month throughout the year, interest on the total amount of drawings is calculated for the average period; i.e., for 6 ½ months ]

Here,

• Total amount of Drawings = (Rs. 2000 × 12) = Rs. 24000

• Period of time = 6 ½ months = 6.5 months

• Rate of Interest = 10% p.a.

★ Interest on Drawings = Rs. 24000 × 10% × 6.5 months

➨ Interest on Drawings = Rs. 24000 × $\sf{\dfrac{10}{100}}$ × $\sf{\dfrac{6.5}{12}}$

➨ Interest on Drawings = Rs. 24000 × $\sf{\dfrac{1}{10}}$ × $\sf{\dfrac{6.5}{12}}$

∴ Interest on Drawings = Rs. 1300 ✪

• ✎ Hence, the amount of interest on drawings if Ram withdrawn Rs. 2000 at the beginning of every month throughout the year is Rs. 1300.

Answer 2

$\huge\mathbb\pink{AnSwEr:-}$

To calculate interest on drawings :-

$\sf\red{drawings \: \times \frac{rate}{100} \times \frac{avg. \: period}{total \: months \: } }$

⟹In case 1:-

drawings= 2000(in beggiNing of every month)

rate= 8%

interest on drawings=

$\sf{⟹avg. \: period \: = \frac{total \: months + 1}{2} = \frac{12 + 1}{2} = 6.5}$

$\sf\blue{⟹2000 \times \frac{8}{100} \times \frac{6.5}{12} = 86.66 = 87}$

⟹In case 2:-

drawings=2000(in middle of every month)

rate= 8%

$\tt{⟹avg. \: period = \frac{total \: months \: }{2} \frac{12}{2} = 6}$

$\sf\green{⟹2000 \times \frac{8}{100} \times \frac{6}{12} = 80}$

⟹In case 3:-

drawings=2000

rate=8%

$\sf{⟹avg. \: period = \frac{total \: months - 1}{2} = \frac{11}{2} = 5.5}$

$\sf\pink{⟹2000 \times \frac{8}{100} \times \frac{5.5}{12} = 73.33 = 73}$

ie ,the interest on drawings of Vinod be 87,80,73 in these respective cases.