Question

monu and sonu are partners sharing profit or losses equally . sonu withdrew Rs.1500 at the end of each month and monu withdrew Rs.2000 at the beginning of each month. calculate interest on drawings at 8%p.a. under Average period method as on 31st march 2020​

Answer 1

ANSWER :

• ✎ If Sonu withdrew Rs. 1,500 at the end of each month throughout the year; Interest on Drawings for the year ended on 31st March, 2020 @8% p.a. is Rs. 660.

• ✎ If Monu withdrew Rs. 2,000 at the end of each month throughout the year; Interest on Drawings for the year ended on 31st March, 2020 @8% p.a. is Rs. 1,040.

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SOLUTION :

❒ Given :-

• Sonu withdrew Rs. 1,500 p.m. at the end of each month throughout the year.

• Monu withdrew Rs. 2,000 p.m. at the beginning of each month throughout the year.

• Interest on drawings to be charged @8% p.a.

❒ To Calculate :-

• Interest on Drawings of Partner Sonu = ?

• Interest on Drawings of Partner Monu = ?

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❒ Calculation of Interest on Drawings of Partner Sonu :-

[If fixed amount are withdrawn at the end of every month throughout the year, interest on the total amount of drawings is calculated for the average period; i.e., for 5 ½ months or 5.5 months.]

Here,

• Amount withdrawn per month = Rs. 1,500

∴ Total amount withdrawn throughout the year = Rs. (1,500 × 12)

➜ Total amount withdrawn throughout the year = Rs. 18,000.

• Rate of Interest on Drawings = 8% p.a.

• Time = 5.5 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. 18,000 × 8% × 5.5 months

➨ Interest on Drawings = Rs. 18,000 × $\sf{\dfrac{8}{100}}$ × $\sf{\dfrac{5.5}{12}}$

∴ Interest on Drawings = Rs. 660

• Hence, Interest on Drawings of Partner Sonu is Rs. 660.

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❒ Calculation of Interest on Drawings of Partner Monu :-

[If fixed amount are withdrawn at the beginning of every month throughout the year, interest on the total amount of drawings is calculated for the average period; i.e., for 6 ½ months or 6.5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• Amount withdrawn per month = Rs. 2,000

∴ Total amount withdrawn throughout the year = Rs. (2,000 × 12)

➜ Total amount withdrawn throughout the year = Rs. 24,000.

• Rate of Interest on Drawings = 8% 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. 24,000 × 8% × 6.5 months

➨ Interest on Drawings = Rs. 24,000 × $\sf{\dfrac{8}{100}}$ × $\sf{\dfrac{6.5}{12}}$

∴ Interest on Drawings = Rs. 1,040

• Hence, Interest on Drawings of Partner Monu is Rs. 1,040.