Question

Q 3. A and B are partners in a firm. Their monthly drawings are ₹ 2,000 each. Interest on drawings is to be charged @ 10% each. Calculate interest on A's drawings for the year 2016-17 assuming drawings are made (i) in the beginning of every month (ii) in the middle of every month (iii) at the end of every month.

Answer 1

I) calculation of interest on A's drawings:-

Average period = time left after first drawing + time left after last drawing / 2

= 12+1/2= 6/5

Interest on drawings=total drawings×rate of interest/100× average period / 12

=2000×12×10/100×6.5/12

= 1,300

II) average period = 6

Int. On drawings= 2000×12×10/100×6/12

=1200

III) av. period= 5.5

Interest on draw. = 2000×12×10/100×5.5×12

=1100

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