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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ANSWER :
- ❖ If in a partnership firm a partner withdraw Rs. 5,000 per month on the first day of every month during the year for personal expenses and interest on drawing is charged at the rate of 6%, then the amount of Interest charged on drawings will be Rs. 1,950.
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SOLUTION :
❒ Given :-
- Amount withdrawn per month on the first day of every month during the year for personal expenses = Rs. 5,000
- Rate of Interest on Drawings to be charged = 6% p.a.
❒ To Calculate :-
- Amount of Interest on Drawings = ?
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❒ Calculation of Interest on Drawings of the partner :-
[If fixed amount are withdrawn at the beginning of every month throughout the year, interest on the total amount of drawings is calculated for the average period; i.e., for 6 ½ months or 6.5 months.]
Here,
- Amount withdrawn per month = Rs. 5,000
∴ Total amount withdrawn throughout the year = Rs. (5,000 × 12)
➜ Total amount withdrawn throughout the year = Rs. 60,000.
- Rate of Interest on Drawings = 6% p.a.
- Time = 6.5 months
We know that,
Using this formula, we get,
- ★ Interest on Drawings = Total Drawings × Rate of Interest × Time
➨ Interest on Drawings = Rs. 60,000 × 6% × 6.5 months
➨ Interest on Drawings = Rs. 60,000 × ×
∴ Interest on Drawings = Rs. 1,950
- Hence, Interest on Drawings of the partner is Rs. 1,950.
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