Question

A partner withdraws identical amount at the end of each month from the firm. At the end of the year total annual drawings is ₹ 12,000. 12 % p.a. interest is chargeable on drawings. Determine the amount of interest on drawings of the year.

Answer 1

Total annual drawings (with identical amount at the end of each month) = ₹ 12,000

∴ Monthly drawings =\(\frac{1200}{12}\) = ₹ 1,000,

Now, P = 1000,

R = 12 and N = \(\frac{66}{12}\)

∴ Interest on drawings = I = \(\frac{PRN}{100}\) =1,000 × \(\frac{12}{100}\) × \(\frac{66}{12}\) = ₹ 660