(Calculation of Interest on Drawings by Simple Method and Product Method). In a partnership, partners are charged interest on drawings @ $15 %$ p.a. During the year ended 31st March, 2018, a partner drew as follows:
Date 1st May, 2017 1st August 2017 30th September, 2017 31st January, 2018 31st March, 2018
Amount (Rs.) 2,000 5,000 2,000 6,000 2,000
What is the interest chargeble from the partner?

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Solution

PRODUCT METHOD
Dates Amount(A) No.of months up to 31st march.2108(B) Product
C= AB
1/5/17 2000 11 22,000
1/8/17 5000 8 40,000
30/9/17 2000 6 12,000
31/1/18 6000 2 12,000
31/3/18 2000 0 0
Total 17000 86,000
Interest on Drawings= 86,00015%1/12 =1075

Simple Method
Date Amount No.of months up to 31st march,2018 Interest@15%
1/5/17 2000 11 275
(200015%11/12)
1/8/17 5000 8 500
(500015%8/12)
30/9/17 2000 6 150
(200015%6/12)
31/1/18 6000 2 150
(600015%*2/12)
31/3/18 2000 0 0
Total 1075

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Date	1st May, 2017	1st August 2017	30th September, 2017	31st January, 2018	31st March, 2018
Amount (Rs.)	2,000	5,000	2,000	6,000	2,000

Dates	Amount(A)	No.of months up to 31st march.2108(B)	Product C= A*B
1/5/17	2000	11	22,000
1/8/17	5000	8	40,000
30/9/17	2000	6	12,000
31/1/18	6000	2	12,000
31/3/18	2000	0	0
Total	17000		86,000

Date	Amount	No.of months up to 31st march,2018	Interest@15%
1/5/17	2000	11	275 (200015%11/12)
1/8/17	5000	8	500 (500015%8/12)
30/9/17	2000	6	150 (200015%6/12)
31/1/18	6000	2	150 (600015%2/12)
31/3/18	2000	0	0
Total			1075