Question

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 ​

Answer 1

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• Amount withdrawn per month on the first day of every month during the year for personal expenses = Rs. 5,000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[If fixed amount are withdrawn at the beginning of every month throughout the year, interest on the total amount of drawings is calculated for the average period; i.e., for 6 ½ months or 6.5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• Amount withdrawn per month = Rs. 5,000

∴ Total amount withdrawn throughout the year = Rs.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➜ Total amount withdrawn throughout the year = Rs. 60,000.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,

• $\dag \: \: \underline{ \boxed{ \sf{ \: Interest \: \: on \: \: Drawings = Total \: \: Drawings \times Rate \: \: of \: \: Interest \times Time \: }}}$

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 × $\sf{\dfrac{6}{100}}$ × $\sf{\dfrac{6.5}{12}}$

∴ Interest on Drawings = Rs. 1,950

• Hence, Interest on Drawings of the partner is Rs. 1,950.