Himanshu withdrews Rs 2,500 at the end month of each month. The partnership deed provides for charging the interest on drawings @ 12% pa. Calculate interest on Himanshu's drawings for they year ending 31 December, 2006.

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Solution

Interest on Himanshu's Drawings

$\Rightarrow Total Drawings \times Rate \times \frac{Average period}{12}$

$\Rightarrow (2, 500 \times 12) \times \frac{12}{100} \times \frac{5 \frac{1}{2}}{12} \Rightarrow 30, 000 \times \frac{12}{100} \times \frac{11}{2 \times 12} = R s 1, 650$

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