During financial year 2021-22, Sahil withdrew ₹30,000 quaterly in the begining of every quater. If interest to be charge is 8% p.a. Calculate the amount of interest on drawings :
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) - ₹6,000.
Sahil withdrew ₹30,000 quarterly in the beginning of every quarter.
Interest = 8% p.a.
Average period = (months left after ist drawings + months left after last drawings)/2
= (12+3)/2
= 15/2
= 7.5 months
Total drawings = 30,000 x 4
= ₹1,20,000
Interest = Total drawings x rate of interest/100 x average period/12
= 1,20,000 x 8/100 x 7.5/12
= ₹6,000