In a partnership firm a partner withdraw
R$5000 per month on the first day of every month during the year for personal expenses. If interest on drawing is charged at the rate of 6% the interest charge will be
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Explanation:
Annual drawing= Rs. 5,000 ×12
= 60,000
Average period = 12+1/2
= 6.5
Interest on drawing = annual drawing × interest rate × average period/12
= 60,000 × 6/100 × 6.5/12
= 1,950
Interest on drawing = Rs. 1,950
Therefore, the interest charge will be Rs. 1,950
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