Calculate interest on drawings @ 12% p.a. for Gambhir if he withdrew 7 2,000 once at the beginning of each month: (a) 7 1,560 (b) 7 1,500 (c) 7 1,200 (d) 7 1,000
please give the solution
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Calculate interest on drawings @ 12% p.a. for Gambhir if he withdrew 7 2,000 once at the beginning of each month: (a) 7 1,560 (b) 7 1,500 (c) 7 1,200 (d) 7 1,000
please give the solution
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Answer: The correct answer is Rs.56160, which is neither of the options given, that means, the options given are wrong
Explanation:
Concept of Interest on drawings:
Interest on drawing is an income for the firm and is to be paid by the partners who has drawn goods or money from the firm, and thus is liable to pay it back with stipulated interest.
Now, According to the question:
Since, drawings are made at the beginning of every month,
Average Period = (Time left after 1st Drawings + Time left after last Drawings ) / 2
= [tex]\frac{12+1}{2}[/tex]
= [tex]\frac{13}{2}[/tex]
= 6.5
Total drawings during the period= 72000×12
= Rs.864000
Rate of interest on drawings= 12%
∴ Interest on drawings= [tex]864000[/tex]×[tex]\frac{12}{100}[/tex]×[tex]\frac{6.5}{12}[/tex]
= [tex]8640[/tex]×[tex]6.5[/tex]
= Rs.56160