Interest on Drawings Calculation

Amount withdrawn: Rs. 3,000
Date of withdrawal: September 30, 2019
Year ending: March 31, 2020
Rate of interest: 9% per annum

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Time Period Calculation

The time period for which interest is to be calculated:

From September 30, 2019 to March 31, 2020 = 6 months

(October, November, December, January, February, March)

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Interest Calculation

Formula: Interest on Drawings = $\text{Amount} \times \text{Rate} \times \frac{\text{Time (in months)}}{12 \times 100}$Amount×Rate×12×100Time (in months)​

Interest = $3,000 \times 9 \times \frac{6}{12 \times 100}$3,000×9×12×1006​

Interest = $3,000 \times 9 \times \frac{6}{1200}$3,000×9×12006​

Interest = $\frac{162,000}{1200}$1200162,000​

Interest = Rs. 135

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Note: Since the amount was withdrawn on September 30, 2019, interest is calculated for the remaining 6 months of the financial year till March 31, 2020. The time is converted to years by dividing the number of months by 12.

Correct Option: 1 (Rs. 135)