Question

Calculate interest on A's drawings:

1. If he has withdrawn ₹ 60,000 on 1st October, 2022 and rate of interest on drawings is 8% per annum.
2. If he has withdrawn ₹ 60,000 on 1st October, 2022 and rate of interest on drawings is 8%.

Books are closed on 31st March, 2023.

Answer 1

(i) Rate of Interest is 8% per annum

Interest on Drawings = `"Amount" xx "Rate"/100 xx "Months"/12`

Interest on Drawings = `60,000 xx 8/100 xx 6/12 = 2,400`

(ii) Rate of Interest is 8%

Interest on Drawings = `"Amount" xx "Rate"/100`

Interest on Drawings = `60,000 xx 8/100 = 4,800`