When the fixed amount is withdrawn at the end of each quarter, intere…

The correct answer is Option (2) → 4½ months

The four quarterly withdrawals made at the end of each quarter remain with the partner for 9, 6, 3 and 0 months. The average period is the average of the first and the last of these.

Average period = (9 + 0) ÷ 2 = 4½ months

Had the money been withdrawn at the beginning of each quarter, the periods would be 12, 9, 6 and 3 months, giving (12 + 3) ÷ 2 = 7½ months.