Calculate interest on drawings @ 12% p.a. if one partner withdraws ₹2,000 once in a month.
Answer & explanation
Correct answer: option 3
The correct answer is option 3- ₹1,440.
Total Money Withdrawn during the year = (2,000 x 12)
= 24,000
Rate of Interest = 12%
Average Period = 12
IF NOTHING IS MENTIONED THEN AVERAGE PERIOD IS TAKEN 6 MONTHS.
Interest on Drawings = Total Money Withdrawn during the year X rate of Interest/100 x Average Period/12
= 24,000 x 12/100 x 6/12
= 1,440