Question

A is a partner in a firm. During the year ended 31st March, 2025, A’s drawings were:

	₹
1st June	1,000
1st August	750
1st October	1,250
1st December	500
1st February	500

Interest on drawings is charged @ 10% per annum. Calculate interest on drawings of A for the year ended 31st March, 2025.

Answer 1

Simple Method:

Date	Amount (₹)	Period (Months upto March 31)	Interest @ 10% (₹)
1st June	1,000	10	83
1st August	750	8	50
1st October	1,250	6	63
1st December	500	4	17
1st February	500	2	8
	4,000		221

Working Note:

1. 1st June Amount: ₹ 1,000 for 10 months

= `1,000 xx 10/100 xx 10/12`

= ₹ 83

2. 1st August Amount: ₹ 750 for 8 months

= `750 xx 10/100 xx 8/12`

= ₹ 50

3. 1st October Amount: ₹ 1,250 for 6 months

= `1,250 xx 10/100 xx 6/12`

= ₹ 63

4. 1st December Amount: ₹ 500 for 4 months

= `500 xx 10/100 xx 4/12`

= ₹ 17

5. 1st February Amount: ₹ 500 for 2 months

= `500 xx 10/100 xx 2/12`

= ₹ 8

Interest on Drawings = 83 + 50 + 63 + 17 + 8

= ₹ 221

Answer 2

Product Method:

Date	Amount (₹)	Period (Months upto March 31)	Product
1st June	1,000	10	10,000
1st August	750	8	6,000
1st October	1,250	6	7,500
1st December	500	4	2,000
1st February	500	2	1,000
	4,000		26,500

Interest on Drawings = `"Total of Products" xx "Rate"/100 xx 1/"Days in a year"`

= `26,500 xx 10/100 xx 1/12`

= 220.83

= 221