Question

Mohan withdrew ₹4,000 at the beginning of each quarter. Calculate interest on drawing at the rate of 6% p.a.

Hint:

When calculating interest on drawings, remember to calculate the interest for each withdrawal according to how long it was in the firm.

Answer 1

Step 1: Understanding the problem.
Interest on drawings is calculated on the amount withdrawn by the partner during the year. Since Mohan withdrew ₹4,000 at the beginning of each quarter, the calculation will involve the total of all four withdrawals, with interest computed for the periods each withdrawal was outstanding. The rate of interest is 6% p.a.
Step 2: Calculation of interest.
For each withdrawal, interest is calculated based on how long the amount remained in the firm: - First withdrawal: ₹4,000 for 3 quarters. - Second withdrawal: ₹4,000 for 2 quarters. - Third withdrawal: ₹4,000 for 1 quarter. - Fourth withdrawal: ₹4,000 for 0 quarters.
Using the formula for interest: \[ \text{Interest} = \text{Amount} \times \frac{\text{Rate} \times \text{Time}}{100} \] \[ \text{Total Interest} = 4000 \times \frac{6 \times 3}{400} + 4000 \times \frac{6 \times 2}{400} + 4000 \times \frac{6 \times 1}{400} = 180 + 120 + 60 = 360 \] Step 3: Conclusion.
The total interest on the drawings is ₹360.