Question

Interest on Drawings by Monthly Drawings Method)Ahmed and Sultan are partners in a firm, Ahmed withdrew Rs. 800 at the end of every month for the six months and Sultan withdrew Rs. 800 at the beginning of every month for the six months ending on 30th June 2002. Calculate interest of drawings @ 15% per annum.​

Answer 1

ANSWER :

• ❖ If Ahmed withdrew Rs. 800 at the end of every month for the six months; then the Interest on Drawings @15% p.a. for the six months ending on 30th June, 2002 will be Rs. 150.

• ❖ If Sultan withdrew Rs. 800 at the beginning of every month for the six months; then the Interest on Drawings @15% p.a. for the six months ending on 30th June, 2002 will be Rs. 210.

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SOLUTION :

❒ Given :-

• Ahmed withdrew in the end of every month for six months = Rs. 800

• Sultan withdrew at the beginning of every month for six months = Rs. 800

• Rate of Interest on Drawings = 15% p.a.

❒ To calculate :-

• Interest on Drawings for Ahmed = ?

• Interest on Drawings for Sultan = ?

❒ Required Formula :-

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

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❒ Calculation of Interest on Drawings for Ahmed :-

Here,

• Amount of Drawings = Rs. 800

• Period of time = 6 months

∴ Total amount of Drawings = (Rs. 800 × 6) = Rs. 4800

• Rate of Interest = 15% p.a.

As withdrawn is made at the end of every month for 6 months, interest on Drawings will be calculated for 2½ months or 2.5 months.

Using the formula of Interest on Drawings, we get,

• ★ Interest on Drawings = Total Drawings × Rate of Interest × Time

➨ Interest on Drawings = Rs. 4800 × 15% × 2.5 months

➨ Interest on Drawings = Rs. ( 4800 × $\sf{\dfrac{15}{100}}$ × $\sf{\dfrac{2.5}{12}}$ )

∴ Interest on Drawings = Rs. 150

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❒ Calculation of Interest on Drawings for Sultan :-

Here,

• Amount of Drawings = Rs. 800

• Period of time = 6 months

∴ Total amount of Drawings = (Rs. 800 × 6) = Rs. 4800

• Rate of Interest = 15% p.a.

As withdrawn is made in the beginning of every month for 6 months, interest on Drawings will be calculated for 3½ months or 3.5 months.

Using the formula of Interest on Drawings, we get,

• ★ Interest on Drawings = Total Drawings × Rate of Interest × Time

➨ Interest on Drawings = Rs. 4800 × 15% × 3.5 months

➨ Interest on Drawings = Rs. ( 4800 × $\sf{\dfrac{15}{100}}$ × $\sf{\dfrac{3.5}{12}}$ )

∴ Interest on Drawings = Rs. 210