If a partner draws a fixed amount of ₹4,000 on the first day of every quarter from the partnership firm, then for what period the interest on total drawings is calculated and how much interest is charged from him if rate of interest is 10% p.a.?
Answer & explanation
Correct answer: option 1
The correct answer is option 1- 7.5 months & ₹1,000.
Financial year = 1st April to 31st March.
Ist drawing = 1st April, so months left after ist drawing is 12.
Last drawing = 1st jan, so months left after last drawing is 3.
Average period = (time left after 1st drawing + time left after last drawing) / 2
= (12+ 3) / 2
= 7.5 months
Total amount of drawings = 4,000 x 4
= ₹16,000
Interest on drawings = Total drawings x (Rate of interest/100) x (Average period/12)
= 16,000 x 10/100 x 7.5/12
= ₹1,000