If the amount is withdrawn at the end of each quarter, the interest is calculated on the total money withdrawn during the year, for a period of ...........
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → 4.5 months
Money withdrawn at the end of each quarter stays out of the business for 9, 6, 3 and 0 months of the year. The average of these periods is the period for which interest is charged on the total drawings.
Average period = (9 + 6 + 3 + 0) ÷ 4
= 18 ÷ 4 = 4.5 months
Why the other options are incorrect:
Option (1) 6 months — Incorrect. Six months is used when the total is given without dates and is taken as drawn evenly through the year.
Option (2) 9 months — Incorrect. Nine months is only the period of the first quarter’s drawing, not the average of the four.
Option (3) 7.5 months — Incorrect. 7.5 months is the average when the money is withdrawn at the beginning of each quarter (12, 9, 6, 3 months).
NCERT (2026-27 edition):
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