Ram and Shyam are partners sharing profits/losses equally. Ram withdrew ₹1,000 p.m. regularly on the first day of every month during the year for personal expenses. If interest on drawings is charged @ 15% p.a. Calculate interest on the drawings of Ram?

₹975

The correct answer is option 3- ₹975.

Total drawings = 1,000*12
                        = 12,000

Average period = (12+1) months/ 2
                         = 6.5 months

Interest on drawings = 12,000 x 15/100 x 6.5/12
                                  = ₹975