Question

Amount of interest to be charged on Hitesh’s drawings will be:

• A. rupee 225
• B. rupee 4,500
• C. rupee 300
• D. rupee 7,200

Hint:

Interest on drawings is calculated for the time period between withdrawal and the closing of accounts.

Answer 1

The Correct Option is C

Hitesh made a withdrawal of rupee 9,000 on November 1st, 2022.

The time period for the drawings is 5 months (November to March). The formula for interest on drawings is: \[ \text{Interest on drawings} = \text{Amount withdrawn} \times\text {Rate} \times \text{Time} \] Applying the values, the interest is calculated as: \[ \text{Interest} = rupee 9,000 \times \frac{8}{100} \times \frac{5}{12} = rupee 300 \]