Question

The details of the entries of the pass book of Louis are given here. Calculate the interest at the rate of 4% per annum he gets for the month on daily product basis.

Date	Particulars	Cheque no.	Debit	Credit	Balance
$01/09/2011$	Balance B/F				$4100.00$
$02/09/2011$	By cheque	$234156$		$500.00$	$4600.00$
$08/09/2011$	By cash			$1000.00$	$5600.00$
$17/09/2011$	To Ravi	$314762$	$3000.00$		$2600.00$
$26/09/2011$	By draft			$1700.00$	$4300.00$

Answer 1

To calculate the interest on daily product basis, we have to consider the balance at the end of each day and find interest for those days. We can do this by calculating the daily product for the month and finding the interest at the given rate for one day. We do this as follows:
Rs. $4100$ for $1$ day: $4100\times 1=$ Rs. $4,100$
Rs. $4600$ for $6$ days: $4600\times 6=$ Rs. $27,600$ (because there was Rs. $4600$ from $2^{nd}$ to $7^{th}$)
Rs. $5600$ for $9$ days: $5600\times 9=$ Rs. $50,400$
Rs. $2600$ for $9$ days: $2600\times 9=$ Rs. $23,400$
Rs. $4300$ for $5$ days: $4300\times 5=$ Rs. $21,500$.
Adding these we get the product for the month. Thus product for the month $=$ Rs. $1,27,000$ and $T=1$ day $=1/365$ years.
Interest for the month $=\frac{127000\times 4}{100\times 365}=\mathrm{13.92.}$
Therefore the interest for the month is Rs. $14$.