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Question
Kavitha is a partner in a firm. She withdraws ₹ 2,500 p.m. regularly. Interest on drawings is charged @ 4% p.a. Calculate the interest on drawings using average period, if she draws
- at the beginning of every month
- in the middle of every month
- at the end of every month
Solution
i. At the beginning of every month:
`2,500 xx 12 xx 4/100 xx 13/24` = ₹ 650
ii. In the middle of every month:
`2,500 xx 12 xx 4/100 xx 12/24` = ₹ 600
iii. At the end of every month:
`2,500 xx 12 xx 4/100 xx 11/24` = ₹ 550
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