Question

Ascertain the amount of each drawing made by B, during the year ending 31st March, 2026, if he withdrew a fixed amount at the beginning of every alternate month starting from 1st April, 2025. The interest on drawings was ₹ 4,725 charged @ 9% p.a.

Answer 1

Given:

Interest on Drawings = ₹ 4,725

Rate of Interest = 9% p.a.

Drawings are made at the beginning of every alternate month, starting from 1st April 2025.

Accounting year ends on 31st March 2026.

1. Identify the Months of Withdrawal

B withdraws money at the beginning of every alternate month starting from 1st April, 2025. This means withdrawals happen 6 times during the financial year on the following dates:

1st April, 1st June, 1st August, 1st October, 1st December and 1st February.

2. Calculate the Average Period

The formula for the average period is:

`"Average Period" = "Months left after 1st drawing + Months left after last drawing"/2`

Months left after 1st drawing (1st April to 31st March): 12 months

Months left after last drawing (1st February to 31st March): 2 months

`"Average Period" = (12 + 2)/2 = 7` months

3. Compute the Total and Individual Drawings

Let the total amount withdrawn during the year be X.

`"Interest on Drawings = Total Drawings" xx "Rate"/100 xx "Average Period"/12`

`4,725 = X xx 9/100 xx 7/12`

`4,725 = X xx 63/1200`

`X = (4,725 xx 1200)/63`

X = 90,000 (Total Drawings)

Since B made a total of 6 equal withdrawals throughout the year:

`"Amount of each drawing" = "Total Drawings"/6`

= `(90,000)/6`

= 15,000