Sumit, a partner in Tours and Travels, withdrew Rs. 4,000 per month at the end of each month during the year e

Question

Sumit, a partner in Tours and Travels, withdrew Rs. 4,000 per month at the end of each month during the year ending March 31, 2020 for his personal use. Calculate the interest on drawings at a simple rate of interest of 10\% per annum.

Accepted Answer

When fixed amounts are withdrawn at the end of every month, interest is calculated for an average period of

5.5

months.Total Drawings =

Rs. 4, 000 \times 12 = Rs. 48, 000

Rate of Interest =

10%

p.a.Average Period =

\frac{11 + 0}{2} = 5.5 months

$

Interest on Drawings = Total Drawings \times \frac{Rate}{100} \times \frac{Average Period}{12}

$

Interest on Drawings = 48, 000 \times \frac{10}{100} \times \frac{5.5}{12} = 4, 800 \times \frac{5.5}{12} = 400 \times 5.5 = 2, 200

Sumit, a partner in Tours and Travels, withdrew $Rs. 4, 000$ per month at the end of each month during the year ending March 31, 2020 for his personal use. Calculate the interest on drawings at a simple rate of interest of $10%$ per annum.

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Sumit, a partner in Tours and Travels, withdrew Rs. 4,000 per month at the end of each month during the year ending March 31, 2020 for his personal use. Calculate the interest on drawings at a simple rate of interest of 10% per annum.