Question

Calculate the amount of Era’s monthly drawings for the year ended 31st March, 2023, in the following cases when interest is charged on drawings @ 10% p.a.

1. When she withdrew a fixed amount at the beginning of each month, and interest on drawings is ₹ 5,200.
2. When she withdrew a fixed amount at the end of each month and interest on drawings is ₹ 6,600.

Answer 1

Let the total drawings during the year be x.

i. Beginning of each month:

Average period = 6.5 months

Interest on drawings = `"Total drawings" × ("Rate of interset")/100 × ("Average period")/12`

5,200 = `x xx 10/100 xx 6.5/12`

5,200 = `(10x)/100 xx 6.5/12`

5,200 = `(65x)/1200`

x = `(5200 xx 1200)/65`

x = 96,000

Monthly drawings = `(96,000)/12`

= 8,000 per month

ii. End of each month:

Average period = 5.5 months

Interest on drawings = `"Total drawings" × ("Rate of interset")/100 × ("Average period")/12`

6,600 = `x xx 10/100 xx 5.5/12`

6,600 = `(10x)/100 xx 5.5/12`

6,600 = `(55x)/1200`

x = `(6,600 xx 1200)/55`

x = 1,44,000

Monthly drawings = `(1,44,000)/12`

= 12,000 per month