Arun, a partner in a firm, withdraws Rs. 1,000 from his capital at the beginning of every month for personal use. What would be the amount of interest on drawings for the whole year given the rate of interest is 9% per annum?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs. 585
When a fixed amount is drawn on the first day of every month, the first withdrawal is out for 12 months and the last for 1 month, so interest on the total drawings is charged for the average period of (12 + 1) ÷ 2 = 6½ months.
Total drawings = 12 × Rs. 1,000 = Rs. 12,000
Interest = Rs. 12,000 × 9/100 × 6.5/12
Interest on drawings = Rs. 585
Drawings at the end of every month would be out for 5½ months on average (Rs. 495), and in the middle of the month for 6 months (Rs. 540); the beginning of the month gives the longest period.
Note: NTA picked this question from an NCERT (2026-27) illustration and changed the figures. Do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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