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Question

Calculate interest on drawings of Mr. Siddhant @ $$10\%$$ p.a. for the year ended 31st March, 2018 in each of the following alternative cases: 
Case 1. If he withdrew $$Rs. 6,000$$ in the beginning of each quarter.
Case 2. If he withdrew $$Rs. 6,000$$ at the end of each quarter:
Case 3. If he withdrew $$Rs. 9,000$$ in the middle of each quarter. 


Solution

Total Drawings in Cases 1 and 2 $$=Rs. 6,000 \times 4 = Rs. 24,000$$;
Total Drawings in Case 3 $$= Rs. 9,000 \times  4 = Rs. 36,000$$. 
Case 1Case 2Case 3
Average Period$$=\dfrac{(12+3)Months}{2}=7.5\, Months$$$$=\dfrac{(9+0)Months}{2} = 4.5\, Months$$$$=\dfrac{(10.5+1.5)Months}{2} = 4.5\, Months$$
Interest on Drawings$$=Rs. 24,000\times \dfrac{7.5}{12}\times \dfrac{10}{100}$$
$$ = Rs. 1,500$$
$$=Rs. 24,000\times \dfrac{4.5}{12}\times \dfrac{10}{100}$$
$$ = Rs. 900$$
$$=Rs. 36,000\times \dfrac{6}{12}\times \dfrac{10}{100}$$
$$ = Rs. 1,800$$

Accountancy

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