Question

What will be the interest on drawings @ 12.5% p.a. for Abhishek if he withdraws
Rs 5,000 once in month?
(A)Rs 3,500
(B)Rs 7,500
(C)Rs 3,750
(D)Rs 3,000

Answer 1

The interest on drawings for Abhishek if he withdraws Rs. 5000 once a month is Rs. 3,750. (Option C)

Given:

Rate of interest=12.5%

Amount of withdrawal= Rs.5,000/ month

To find:

Amount of interest

Solution:

We can find the solution by following a few steps-

We know that the interest on drawings is calculated for 6 months if the duration is not given.

So, we will calculate the interest for 6 months.

Amount of withdrawal for the year=5,000×12

=60,000

Interest on drawings= 12.5% of 60,000 for 6 months

=1/8×60,000×6/12

=60,000/16

=Rs. 3,750

Therefore, the Interest on drawings is Rs.3,750.