Amit, a partner in a partnership firm withdrew ₹7,000 in the beginning of each quarter. For how many months (average period) would interest on drawings be charged:
Answer & explanation
Correct answer: option 3
The correct answer is option 3- 7.5 months.
Ist drawing = 1 April so 12 months are left
Last drawing = 1 Jan so 3 month is left.
Average period = (Months left after 1st drawing + Months left after last drawing) /2
= (12+3) months/2
= 7.5 months