— Kishore V, SME and ACW at Edumarz
If a fixed sum is withdrawn on the first day of each quarter, interest is computed on the amount withdrawn over a seven-and-a-half-month period.
For example, if a partner withdraws ₹1,000 at the start of each quarter and the interest rate on the drawings is 10%, the interest on the drawings is computed as follows:
The total number of drawings made by the partner over the course of the year is ₹4,000, or ₹1,000 x 4.
₹4,000 x 10% x 7(1/2) / 12 = ₹1,250 in interest on drawings.