Solve the question number 9th
Solution :-
ii) If a partner withdraws fixed amount in the beginning of every month, interest is charged on the whole amount for 6.5 months.
Interest on Drawings = Total Drawings x Rate of Interest/100 x Average Period/12
Total Drawings = 1,000 x 12 = 12,000
Average Period = 12 months + 1 month/2 = 6.5 months
Interest on Drawings = 12,000 x 10/100 x 6.5/12
= 650
iii) If a partner withdraws fixed amount at the end of every month, interest is charged for 5.5 months (i.e., average period) on the total amount.
Interest on Drawings = Total Drawings x Rate of Interest/100 x Average Period/12
Average Period = 11 Months + 0 month / 2 = 5.5 months
Interest on Drawings = 12,000 x 15/100 x 5.5/12
= 825
iv) If a partner withdraws fixed amount in the middle of every month, interest is charged for 6 months on the total amount.
Interest on Drawings = 12,000 x 10/100 x 6.5/12
= 650
v) If amount of Drawings are fluctuating :-
By Product method
Interest on Drawings = Total of Product x Rate x 1/12
= 84,500 x 10% x 1/12
= 704.167
vi) If a partner withdraws fixed amount in the beginning of each quarter, interest is charged on the whole amount for 7.5 months.
Interest on Drawings = Total Drawings x Rate of Interest/100 x Average Period/12
Average Period = 12 Months + 3 month / 2 = 7.5 months
Interest on Drawings = 12,000 x 10/100 x 7.5/12
=750
vii) If a partner withdraws fixed amount in the middle of each quarter, interest is charged for 6 months on the total amount.
Interest on Drawings = Total Drawings x Rate of Interest/100 x Average Period/12
Average Period = 10.5 Months + 1.5 month / 2 = 6 months
Interest on Drawings = 12,000 x 10/100 x 6
=7,200
ii) If a partner withdraws fixed amount in the beginning of every month, interest is charged on the whole amount for 6.5 months.
Interest on Drawings = Total Drawings x Rate of Interest/100 x Average Period/12
Total Drawings = 1,000 x 12 = 12,000
Average Period = 12 months + 1 month/2 = 6.5 months
Interest on Drawings = 12,000 x 10/100 x 6.5/12
= 650
iii) If a partner withdraws fixed amount at the end of every month, interest is charged for 5.5 months (i.e., average period) on the total amount.
Interest on Drawings = Total Drawings x Rate of Interest/100 x Average Period/12
Average Period = 11 Months + 0 month / 2 = 5.5 months
Interest on Drawings = 12,000 x 15/100 x 5.5/12
= 825
iv) If a partner withdraws fixed amount in the middle of every month, interest is charged for 6 months on the total amount.
Interest on Drawings = 12,000 x 10/100 x 6.5/12
= 650
v) If amount of Drawings are fluctuating :-
By Product method
Date of Withdrawal | Amount Withdrawn | Period | Product |
30th April | 3,000 | 11 | 33,000 |
30th June | 2,000 | 9 | 18,000 |
1st October | 4,000 | 6 | 24,000 |
31st December | 1,500 | 3 | 4,500 |
1st February | 2,500 | 2 | 5,000 |
Total | 84,500 |
Interest on Drawings = Total of Product x Rate x 1/12
= 84,500 x 10% x 1/12
= 704.167
vi) If a partner withdraws fixed amount in the beginning of each quarter, interest is charged on the whole amount for 7.5 months.
Interest on Drawings = Total Drawings x Rate of Interest/100 x Average Period/12
Average Period = 12 Months + 3 month / 2 = 7.5 months
Interest on Drawings = 12,000 x 10/100 x 7.5/12
=750
vii) If a partner withdraws fixed amount in the middle of each quarter, interest is charged for 6 months on the total amount.
Interest on Drawings = Total Drawings x Rate of Interest/100 x Average Period/12
Average Period = 10.5 Months + 1.5 month / 2 = 6 months
Interest on Drawings = 12,000 x 10/100 x 6
=7,200