Question

Ram is a partner in a firm.He withdrew Rs 2000 per month on the last day of every month during the year 2014. If interest on drawings is charged @ 9% p.a the interest charged will be:​

Answer 1

Interest on drawings will be ₹ 990.

Explanation:

Given:

• Withdrawn amount = ₹ 2,000 per month
• Time of withdrawal = At the last day of every month
• Rate of interest = 9% P.a.
• Interest on drawings = ??

Solution :

Total amount of drawings = 2,000 × 12

Total amount of drawings = ₹ 24,000

If drawings are made at the end of every month :

Average period = 5.5

★ Interest on drawings =

$\sf{\longrightarrow{Amount \: of \: drawings \: \times \: \dfrac{Rate \: of \: interest}{100} \: \times \: \dfrac{Average \: period}{12}}}$

$\longrightarrow{\sf{24,000 \: \times \: \dfrac{9}{100} \: \times \: \dfrac{5.5}{12}}}$

$\sf{\longrightarrow{990}}$

Interest on drawings = ₹ 990

∴ Interest on drawings will be ₹ 990.

Answer 2

Explanation:

• Ram withdraws Rs 2000  at the end of each month.

Annual drawing = 12 × 2,000 = Rs. 24,000

Annual drawing = Rs. 24,000

Average period = 5.5

Rate = 9%

Interest on drawing = annual drawing × rate × average period /12

= 24,000 × (9/100) × (5.5/12)

= 990

Interest on drawing = Rs. 990

Hence, Interest on drawing = Rs. 990