Question

Calculate interest on drawings of Mr. Ashok @ 10% p.a. for the year ended 31st March, 2014, 

In each of the following alternative cases:

 Case a. If he withdrew Rs.7,500 in the beginning of each quarter. 

Case b. If he withdrew Rs.7,500 at the end of each quarter. 

Case c. If he withdrew Rs.7,500 during the middle of each quarter.

Answer 1

Total drawing =7,500 x 4 =Rs. 30,000 

Interest Rate = 10% p.a

case (a): when equal amount is withdrawn in the beginning of each quarter the interest on drawings is calulated for an average period of 7.5 months 

Case (b): when equal amount is withdrawn in the beginning of each quarter the interest on drawings is calculated for an average period of 4.5 months. 

Case (c) : when equal amount is withdrawn in the beginning of each quarter the interest on drawings is calculated for an average period of 4.5 months.