Question

Kavitha is a partner in a firm. She withdraws ₹ 2,500 p.m. regularly. Interest on drawings is charged @ 4% p.a. Calculate the interest on drawings using average period, if she draws

1. at the beginning of every month
2. in the middle of every month
3. at the end of every month

Answer 1

i. At the beginning of every month:

`2,500 xx 12 xx 4/100 xx 13/24` = ₹ 650

ii. In the middle of every month:

`2,500 xx 12 xx 4/100 xx 12/24` = ₹ 600

iii. At the end of every month:

`2,500 xx 12 xx 4/100 xx 11/24` = ₹ 550