Solve the question with given methods
Solution-
(a) Simple method
(b) Product Method
Interest on Aarushi's drawing = Total x rate x (1/12)
= 70000 x 12% x 1/12
= Rs 700
(a) Simple method
| Date | Amount | No. of month left up to 31st March 2015 | Interest |
| 01-08- 2014 | 5000 | 8 | 5000 x 12% x (8/12) = 400 |
| 31-12-2014 | 10000 | 3 | 10000 x 12% x (3/12) = 300 |
| 31-03-2015 | 15000 | 0 | 15000 x 12% x0/12 = 0 |
| Interest on Aarushi's drawing | 700 |
(b) Product Method
| Date | Amount (A) | No. of month left up to 31st March 2015 (B) | Product (AXB) |
| 01-08- 2014 | 5000 | 8 | 40000 |
| 31-12-2014 | 10000 | 3 | 30000 |
| 31-03-2015 | 15000 | 0 | 0 |
| TOTAL | 70000 |
Interest on Aarushi's drawing = Total x rate x (1/12)
= 70000 x 12% x 1/12
= Rs 700