Partnership firm and partners are considered separate from each other. when partners withdraw money from business for their personal use, then the term used for such withdrawal of money is termed as Drawings. Since drawing is a type of loan, provided to the partners and they have to pay interest on the amount withdrawn from the firm, which is known as interest on drawings.

If a partner withdrew ₹15000 during the year and If interest on drawings is charged at 6%, how much interest will be charged?

₹900

The correct answer is option 4 i.e. ₹900

When interest rate is given without the word per annum, then interest is calculated for the full year.

Interest on drawings = 15000 x 6/100
                              = 900