Mr. Kunal withdrew ₹10,000 per month at the end of each month from a firm for his personal use during the year ending March 31, 2022. What will be the interest on drawings if charged @ 8% p.a.?

Rs 4,400

The correct answer is option 4- ₹4,400.

Total drawings = 10,000 x 12
                     = 1,20,000

Rate of interest = 8% p.a.

Ist drawing = 30 April. So, months left after ist drawing is 11.
Last drawing = 31 March. So, months left after last drawing is 0.
Average period = (Months left after ist drawings + Months left after last drawings)/2
                       = (11+0)/2
                       = 11/2
                       = 5.5

Interest on drawings = Total drawings x rate of interest/ 100 x Average period /12
                              = 1,20,000 x 8/100 x 5.5/12
                              = 4,400