Question

Sneha is a partner in a firm. Calculate the amount of Sneha’s quarterly drawings for the year ended 31st March, 2023, in the following cases when interest is charged @ 10% p.a.

1. When she withdrew a fixed amount in the beginning of each quarter and interest on drawings is ₹ 3,750.
2. When she withdrew a fixed amount at the end of each quarter and interest on drawings is ₹ 3,000.

Answer 1

Let the total drawings during the year be x.

i. Beginning of each quarter:

Average period = `(12 + 3)/2`

= `15/2`

= 7.5 months

Interest on drawings = `"Total drawings" × "Rate of interest"/100 × "Average period"/12`

3,750 = `x xx 10/100 xx 7.5/12`

3,750 = `(75x)/(1,200)`

x = `(3,750 xx 1,200)/75`

x = 60,000

Quarterly drawings = `(60,000)/4`

= ₹ 15,000 per quarter

ii. End of each quarter:

Average period = `(12 - 3)/2`

= `9/2`

= 4.5 months

Interest on drawings = `"Total drawings" × "Rate of interest"/100 × "Average period"/12`

3,000 = `x xx 10/100 xx 4.5/12`

3,000 = `(45x)/(1,200)`

x = `(3,000 xx 1,200)/45`

x = 80,000

Quarterly drawings = `(80,000)/4`

= ₹ 20,000 per quarter