Question

Gargi withdrew ₹ 15,000 p.m. for six months ended 30th September, 2024. Calculate interest on drawings @ 8% p.a. in the following cases for the year ended 31st March, 2025.

1. When she withdrew the amount in the beginning of every month.
2. When she withdrew the amount in the middle of every month.
3. When she withdrew the amount at the end of every month.

Answer 1

Gargi withdrew ₹ 15,000 p.m. for six months ended 30th September, 2024 (i.e., from April to September 2024).

Total drawings = 15,000 × 6 months

= ₹ 90,000

a. When she withdrew the amount in the beginning of every month.

Average period for beginning of month (6 months) = `(6 + 1)/2`

= 3.5 months

Total average period up to 31st March, 2025 = 3.5 + 6

= 9.5 months

Interest on drawings = `90,000 xx 8/100 xx 9.5/12`

= ₹ 5,700

b. When she withdrew the amount in the middle of every month.

Average period for middle of month (6 months) = `(5.5 + 0.5)/2`

= 3 months

Total average period up to 31st March, 2025 = 3 + 6

= 9 months

Interest on drawings = `90,000 xx 8/100 xx 9/12`

= ₹ 5,400

c. When she withdrew the amount at the end of every month.

Average period for end of month (6 months) = `(5 + 0)/2`

= 2.5 months

Total average period up to 31st March, 2025 = 2.5 + 6

= 8.5 months

Interest on drawings = `90,000 xx 8/100 xx 8.5/12`

= ₹ 5,100