Illustration : 4
A partner draws Rs.1,000 p.m. Interest is to be charged at 10% p.a. Calculate interest on drawings, if the drawings are made
i) in the beginning of the month;
ii) in the middle of the month and
iii) at the end of the month during the year.
Solution:
The total amount of drawings is Rs.12,000 (Rs.1,000 x 12 months).
The rate of interest is 10%. Take the period at the average of the periods
applicable to the first and the last installments.
A partner draws Rs.1,000 p.m. Interest is to be charged at 10% p.a. Calculate interest on drawings, if the drawings are made
i) in the beginning of the month;
ii) in the middle of the month and
iii) at the end of the month during the year.
Solution:
The total amount of drawings is Rs.12,000 (Rs.1,000 x 12 months).
The rate of interest is 10%. Take the period at the average of the periods
applicable to the first and the last installments.
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