Jaron, a partners in IT Travels withdrew same amount of money at the end of each quarter, for his personal use. The firm charged ₹465 as interest on his drawings. Interest on drawings is to be charged at 8% per annum. What amount was withdrawn by him at the end of each quarter?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) - ₹3,875.
Drawings are made at the end of each quarter.
Ist drawing = 30 June
Last drawing = 31st March
Average period = (Months left after ist drawings + Months left after last drawings)/2
= (9 + 0)/2
= 4.5 months
Interest on drawings = Total drawings x Rate of interest/100 x Average period/12
465 = Total drawings x 8/100 x 4.5/12
Total drawings = 465 x 100/8 x 12/4.5
= ₹15,500
Total drawings for the full year = ₹15,500
4 quarters in a year
Drawing in each quarter = 15,500/4
= ₹3,875