Choose the amount of interest on Drawings charged from Ajay if he withdraw ₹10,000 at the beginning of each month from the firm for his personal use during the year ending March 31,2022 for whole year and interest on Drawing is charged @8% p.a.

₹5,200

The correct answer is option 3- ₹5,200.

Ist drawing = 1st April
Last drawing = 1st March
Average period = (Months left after ist drawings + Months left after last drawings)/2
                       = (12 + 1)/2
                       = 13/2
                       = 6.5 months

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

Interest = Total drawings x rate of interest/100 x average period/12
            = 1,20,000 x 8/100 x 6.5/12
            = ₹5,200