One of the partners in a partnership firm has withdrawn Rs. 9,000 at the end of each quarter, throughout the year. Calculate interest on drawings at the rate of 6% per annum.

Solution

Amount of Drawings = Rs. 9,000 per quarter
Annual Drawings = Rs. (9,000 × 4) = Rs. 36,000
Rate of Interest on Drawings = 6% p.a.

Average Period	=	(Months remaining after the first drawings + Months remaining after the last drawings)/2
	=	(9 + 0)/2 = 4.5 months
Interest on Drawings	=	(Annual drawings × Rate of Drawings/100 × Average Period/12)
	=	(36,000 × 6/100 × 4.5/12) = Rs. 810