Question

Calculate the amount of interest on drawings if x withdraws 8000 at the beginning of each month for 9 months and rate of drawings 10%

Answer 1

Answer:

Interest on drawings is the amount charged by firm from its partners when partners withdraw some amount for their personal use.

Interest on drawings can be calculated using the formula given below:

Interestondrawings=Drawingsamount×Rateofinterest×AveragePeriod

Given items are rate of interest as 10% p.a. and these drawings are made at beginning of every month. The interest on drawings is Rs650

Substitute values in the above equation

650=Drawingsamount×

100

10

×

12

6.5

10×6.5

650×100×12

=DrawingsAmount

Rs12,000=DrawingsAmount

Drawings for the year is Rs12,000. Hence drawings per month is Rs1,000.