Answer :
To calculate the interest on capitals and drawings for Balu and Seenu, we need to consider both their initial capitals and their drawings over the year. The interest rate given is 6%.
Step-by-Step Calculation:
1. Interest on Capitals:
Since profits and losses are shared equally, the capitals need to be considered for the full year.
- Balu's Capital = Rs. 60,000
- Seenu's Capital = Rs. 40
The formula to calculate annual interest is:
[tex]\text{Interest} = \text{Capital} \times \frac{\text{Rate}}{100}[/tex]
**Balu's Interest on Capital: **
[tex]60,000 \times \frac{6}{100} = Rs. 3,600[/tex]
**Seenu's Interest on Capital: **
[tex]40 \times \frac{6}{100} = Rs. 2.4[/tex]
2. Interest on Drawings:
To calculate the interest on drawings, we must take into account the timing of each drawing, assuming that the interest is calculated at the end of the financial year, March 31, 1994.
The formula for interest on drawings is:
[tex]\text{Interest on Drawings} = \text{Drawing Amount} \times \frac{\text{Number of Months remaining till Year End}}{12} \times \frac{\text{Rate}}{100}[/tex]
Balu's Drawings:
31.03.1993 - Rs. 10: 12 months
[tex]10 \times \frac{12}{12} \times \frac{6}{100} = Rs. 0.6[/tex]30.04.1993 - Rs. 1200: 11 months
[tex]1200 \times \frac{11}{12} \times \frac{6}{100} = Rs. 66[/tex]01.07.1993 - Rs. 900: 9 months
[tex]900 \times \frac{9}{12} \times \frac{6}{100} = Rs. 40.5[/tex]01.12.1993 - Rs. 2800: 4 months
[tex]2800 \times \frac{4}{12} \times \frac{6}{100} = Rs. 56[/tex]
Total Interest on Balu's Drawings:
[tex]0.6 + 66 + 40.5 + 56 = Rs. 163.1[/tex]
Seenu's Drawings:
Seenu drew Rs. 400 at the end of each month.
Each drawing made on the last day spans a decreasing number of months till March.
Assuming Seenu drew consistently, there will be 12 draw periods.
For simplicity, first calculate the interest for one drawing and then multiply by 12:
[tex]\text{Average Draw Period} = \frac{6.5}{12}[/tex]
between months 1 to 12:
[tex]400 \times \text{Average draw Period across 12 drawings} \times \frac{6}{100} = Rs. 156[/tex]
Interest on Total Drawings (approximate):
Approximately Rs. 156
Total Interest Summary:
Balu's Net Interest after drawings:
[tex]3600 - 163.1 = Rs. 3436.9[/tex]Seenu's Net Interest after drawings (approximate):
[tex]2.4 - 156 = -Rs. 153.6[/tex]
Hence, Balu will have an additional Rs. 3436.9 after adjusting for drawings and Seenu will effectively have deducted Rs. 153.6 from his interest due to his consistent monthly drawings.
