Dev withdrew Rs. 10,000 on 15th day of every month. Interest on drawings was to be charged @ 12% per annum. Calculate interest on Dev’s drawings. (C.B.S.E. 2019)

SOLUTION

Dev Total Drawings = Rs. 10,000 x 12 = Rs. 1,20,000
Interest on Dev’s Drawings = Rs. 1,20,000 x 12 / 100 x 6 / 12* = Rs. 7,200.
Average Period = Time left after first Drawing + Time left after last Drawing / 2

Average Period = 11.5 + 0.5 / 2 = 6 Months.


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