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Question
X is a partner in a firm. He withdrew regularly ₹ 1,000 at the beginning of every month for the six months ending 31st March, 2024. If interest on drawings is charged @ 8% p.a., the interest charged will be ______.
Options
₹ 240
₹ 140
₹ 100
₹ 120
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Solution
X is a partner in a firm. He withdrew regularly ₹ 1,000 at the beginning of every month for the six months ending 31st March, 2024. If interest on drawings is charged @ 8% p.a., the interest charged will be ₹ 140.
Explanation:
Monthly withdrawal = ₹ 1,000
Total withdrawals for 6 months = 1,000 × 6
= ₹ 6,000
Since drawings are made at the beginning of each month for 6 months.
The periods will be 6, 5, 4, 3, 2, 1 month.
Average period = `(6 + 1)/2`
= `7/2`
= 3.5 months
Interest on drawing = `6,000 xx 8/100 xx 3.5/12`
= 6,000 × 0.08 × 0.2917
= ₹ 140
