Question

X and Z were partners in a firm Durit-
the year X withdraws € 2,500 at the end
of each month and Z withdraws 7 1,750
at the beginning of each month. Calculate
interest on their drawings @ 8% p.a.

Answer 1

Answer:

Explanation:

INTREST ON DRAWINGS FOR X

• AMT WITHDRAW DURING THE YEAR IS 2500×12=30,000

FIXED AMT WITHDRAW AT THE END OF EVERY MONTH

INT ON DRAWINGS = 30,000×8%×5.5/12=1,100

INTREST ON DRAWINGS FOR Z

AMT WITHDRAW AT THE BEGINNING OF EVERY MONTH

               IS 1,750×12=21,000

INTREST ON DRAWINGS = 21,000×8%×6.5/12=910

Answer 2

ANSWER :

• ❖ Interest on Drawings @8% if X withdraws Rs. 2,500 at the end of every month during the year is Rs. 1,100.

• ❖ Interest on Drawings @8% if Z withdraws Rs. 1,750 in the beginning of every month during the year is Rs. 910.

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SOLUTION :

❒ Given :-

• X withdraws Rs. 2500 per month at the end of each month during the year.

• Z withdraws Rs. 1,750 per month in the beginning of each month during the year.

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

❒ To Calculate :-

• Interest on Drawings of X = ?

• Interest on Drawings of Y = ?

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❒ Calculation of Interest on Drawings of X :-

[If an equal amount is withdrawn as drawings at the end of every month throughout the year, interest on the total amount of drawings is calculated for the average period; i.e., for 5 ½ months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• Amount withdrawn = Rs. 2,500

➨ Total Amount withdrawn = Rs. (2,500 × 12) = Rs. 30,000

• Rate of Interest = 8% p.a.

• Time = 5.5 months

Using the formula of Interest on Drawings,

• ★ Interest on Drawings = Total Drawings × Rate of Interest × Time

⇒ Interest on Drawings = Rs. 30,000 × 8% × 5.5 months

⇒ Interest on Drawings = $\sf{Rs. \bigg(30,000 \times \dfrac{8}{100} \times \dfrac{5.5}{12} \bigg)}$

∴ Interest on Drawings = Rs. 1,100

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❒ Calculation of Interest on Drawings of Z :-

[If an equal amount is withdrawn as drawings in the beginning of every month throughout the year, interest on the total amount of drawings is calculated for the average period; i.e., for 6 ½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• Amount withdrawn = Rs. 1,750

➨ Total Amount withdrawn = Rs. (1,750 × 12) = Rs. 21,000

• Rate of Interest = 8% p.a.

• Time = 6.5 months

Using the formula of Interest on Drawings,

• ★ Interest on Drawings = Total Drawings × Rate of Interest × Time

⇒ Interest on Drawings = Rs. 21,000 × 8% × 6.5 months

⇒ Interest on Drawings = $\sf{Rs. \bigg(21,000 \times \dfrac{8}{100} \times \dfrac{6.5}{12} \bigg)}$

∴ Interest on Drawings = Rs. 910