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Any anyone explain and give an example for the highlighted para. It is from the partnership account chapter, interest on drawings.
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It basically tells how to calculate interest when it is amount withdrawn is consistent , like beginning of each quarter --> 7.5 (30/4) how 30 came --> (12+9+6+3) For example Calculate interest on drawing of Vimal if the withdrew Rs.48000 in year withdrawn evenly: a)At beginning of each Quarter b)In the middle of each Quarter c)At end of each Quarter rate is 10% P. A. Solution: Case I: Drawing made on beginning of each quarter interest on drawing = Amount x Rate/100 x 7.5/12 = 48,000 x 10/100 x 7.5/12 = Rs.3,000 Case II: Drawing made in middle of each quarter interest on drawing = Amount x Rate/100 x 6/12 = 48,000 x 10/100 x 6/12 = Rs.2,400 Case III Drawings made at end of each quarter interest on drawing = Amount x Rate/100 x 4.5/12 = 48,000x10/100 x 4.5/12 = Rs.1800 Similarly Interest can be calculated by following formulas: Half yearly Drawings for year when: Drawings are made in the beginning of each period (half year) interest on drawing = Amount x Rate/100 x 9/12 Drawings are made in the middle of each period (half year) interest on drawing = Amount x Rate/100 x 6/12 Drawings are made at the end of each period (half year) interest on drawing = Amount x Rate/100 x 3/12 For monthly drawings for 6 months: Drawings are made in beginning of each month Interest = Amount x Rate/100 x 3.5/12. When drawings are made in the middle of each month interest = Amount x Rate/100 x 3/12.
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