Match List – I with List – II. List - I(Equal amount of drawings made…

The correct answer is Option (4) - (A)-(IV), (B)-(III), (C)-(II), (D)-(I).

List - I (Equal amount of drawings made)	List - II (Number of month for which interest calculated)
(A) At the end of each half year	(IV) 3 months
(B) At the beginning of each quarter	(III) 7.5 months
(C) At the beginning of each month	(II) 6.5 months
(D) At the end of each quarter	(I) 4.5 months

 

Average period is calculated for calculating interest on drawings and the average period depends on the timing of withdrawal.
The formula for calculating the average period is
= (Months left after Ist drawing + Months left after last drawing) / 2

After calculating the average period interest on drawings is calculated. The formula for calculating interest on drawing is =
Total drawings X Rate of interest/100 X Average period/12

The financial year = 1st April to 31st March

When the amount is withdrawn at the end of each half year.
Ist drawing = 30 Sept, so months left after it are 6.
Last drawing = 31 march, so months left after it are 0.
Average Period = (No. of months left after 1 drawings + No. of months left after last drawings)/2
                        = (6 +0)/ 2
                        = 3 months

When the amount is withdrawn at the beginning of each quarter.
Ist drawing = 1st April, so months left after it are 12.
Last drawing = 1st Jan, so months left after it are 3.
Average Period = (No. of months left after 1 drawings + No. of months left after last drawings)/2
                        = (12+3)/ 2
                        = 7.5 months

When the amount is withdrawn at the beginning of each month. 
Ist drawing = 1st April, so months left after it are 12.
Last drawing = 1st March, so months left after it are 1.
Average Period = (No. of months left after 1 drawings + No. of months left after last drawings)/2
                         = (12+1)/ 2
                         = 6.5 months

When the amount is withdrawn at the end of each quarter.
Ist drawing = 30th June, so months left after it are 9.
Last drawing = 31st March, so months left after it are 0.
Average Period = (No. of months left after 1 drawings + No. of months left after last drawings)/2
                         = (9+0)/ 2
                         = 4.5 months