Question

Mr. Alok owes Mr. Chirag ` 650 on 1

st January 2018. From January to March, the following further

transactions took place between Alok and Chirag

January 15 Alok buys goods ` 1,200

February 10 Alok buys goods ` 850

March 7 Alok received Cash loan ` 1,500

Alok pays the whole amount on 31st March, 2018 together with interest @ 6% per annum. Calculate the interest by

average due date method.​

Answer 1

Answer:

Alok pays the whole amount on 31st March, 2018 together with interest at 6% per annum

Due Date Amount No. of days from Jan. 1 Product

2018 Rs.

Jan1 650 0 0

Jan 15 1,200 14 16,800

Feb 10850 40 34,000

March 71,500 65 97,500

4,200 1,48,300

Average due date = Base + days equal to

Sumoftheamounts

SumofProducts

= Jan. 1+[ 4,200/1,48,300]

]

= Jan. 1 +35.31 days

= Feb 6

Interest therefore has been calculated on Rs. 4200 from 6th Feb to 31st March i.e., for 54 days

4,200×6%×54/365=Rs.37.28