Ram and Shyam are partners sharing profits/losses equally. Ram withdrew ₹1,000 p.m. regularly on the first day of every month during the year for personal expenses. If interest on drawings is charged @ 15% p.a. Calculate interest on the drawings of Ram?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- ₹975.
Total drawings = 1,000*12
= 12,000
Average period = (12+1) months/ 2
= 6.5 months
Interest on drawings = 12,000 x 15/100 x 6.5/12
= ₹975