Read the information carefully and answer the questions.
A partner withdrew money during the year ending March 31, 2020 from his capital account, for his personal use.
The amounts withdrawn were : ₹12,000 on June 01, 2019, ₹8,000; on August 31, 2019, ₹3,000; on September 30, 2019, ₹7,000, on November 30, 2019, and ₹6,000 on January 31, 2020.
Calculate interest on drawings, if the rate of interest is 9 percent per annum.
Calculate Interest on drawings for the amount of ₹7,000 withdrawn on November 30, 2019.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs. 210
Each drawing carries interest from its own date up to the closing date of the year. Rs. 7,000 drawn on November 30, 2019 is out for December to March, that is, 4 months up to March 31, 2020.
Amount = Rs. 7,000; rate = 9% p.a.; period = 4 months
Interest = Rs. 7,000 × 9/100 × 4/12
= Rs. 210
Rs. 630 is the interest for a full year on Rs. 7,000.
NCERT (2026-27 edition):
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