Aashish withdrew Rs. 10,000 per month from the firm for his personal use during the year ending March 31, 2017. Calculate the interest on drawings, which is charged @8% p.a., when the amount is withdrawn at the beginning of each month-

Rs. 5,200

The correct answer is Option (2) → Rs. 5,200

• Drawings = ₹10,000 per month

• Withdrawn at the beginning of each month

• Period = 12 months (April 2016 – March 2017)

• Rate of interest = 8% p.a.

For withdrawals at the beginning of each month, average period = 6.5 months.

Total Drawings=10,000×12=1,20,000

Interest on Drawings=Total Drawings× Rate × Average Period​/12

Interest=1,20,000× 8/100 x 6.5/12 = ₹5,200