CBSE Class 12-commerce Answered

Sr.
no.

Circumstances

Calculation of Interest

1

If amount of drawings are drawn at the beginning of every month.

Interest is charged on the whole amount for 6 and a half (6.5) months at an agreed rate per annum.

2

If amount of drawings is drawn as a fixed sum in the middle of every month.

Interest is charged on the whole amount for 6 months at an agreed rate per annum.

3

If amount of drawings is drawn as a fixed sum at the end of every month.

Interest is charged on the whole amount for 5 and a half (5.5) months at an agreed rate per annum.

4

If amount of drawings is drawn as fixed sum in the beginning of each quarter.

Interest is charged on the whole amount for a period of 7 and a half (7.5) months at an agreed rate per annum.

5

If the partner withdraws a fixed sum in the middle of each quarter.

Interest is charged on the whole amount for a period of 6 months at an agreed rate per annum.

6

If the partner withdraws a fixed sum at the end of each quarter.

Interest is charged on the whole amount for a period of 4 and a half (4.5) months at an agreed rate per annum.

7

If the partner withdraws unequal amount on different dates.

Interest is calculated using simple method or product method.

8

If dates of drawings are given and the interest is to be charged at an agreed rate per annum.

Interest is calculated on the basis of time.

9

If the date of withdrawal is not given.

Interest on total drawings for the year is calculated for six months on the average basis.

10

If the rate of interest is given without the word ‘per annum.’

Interest is charged without considering the time factor.