Kevin is a partner in a firm, He withdrew2.000 p.m.regularly at the beginning of the month Interest on drawings is charged at 4% pa. Calculate interest on drawings for the year ending 31 March 2019 uning average period.
Answers
Given:
- Kevin is a partner in a firm, who withdrew Rs 2,000 per month regularly at the beginning of every month.
- Interest on drawings is charged at 4% p.a.
To find: The interest on drawings of Kevin for the year ending 31st March, 2019.
Answer:
If a partner withdraws a fixed amount at the beginning of every month, the formula below is used to calculate the interest on drawings:
Interest on drawings = Total drawings × (Rate ÷ 100) × (6.5 ÷ 12)
From the data given, we have:
- total drawings = Rs 2,000 × 12 = Rs 24,000
- rate = 4%
Substituting them in the formula,
Interest on drawings = Rs 24,000 × (4 ÷ 100) × (6.5 ÷ 12)
Interest on drawings = Rs 520
Therefore, the interest on drawings of Kevin when he withdraws Rs 2,000 per month at the beginning of every month at the rate of 4% p.a. is Rs 520.
Answer:
Total amount ₹ 24,000
Intrest = ₹ 520
Explanation:
☆Given datas:-
- Kevin is a partner in a firm, He withdrew 2,000 p.m. regularly at the beginning of the month
- Interest on drawings is charged at 4% p.a.
☆Required:-
- Calculate interest on drawings for the year ending 31 March 2019 using average period
☆Solution:-
Intrest = Total amt × Rate × Average period
Total amt withdrew during the year is 2,000 × 12 = ₹ 24,000
Average period = 6.5 months
Rate = 4%
Intrest = 24,000 × ⁴/₁₀₀ × ⁶°⁵/₁₂
Intrest = 520
There fore total amount withdrew during the year is ₹ 24,000 and intrest is ₹ 520