Choose the amount of interest on Drawings charged from Ajay if he withdrew ₹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.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → ₹5,200
When an equal amount is withdrawn at the beginning of every month, interest on the total drawings is charged for an average period of 6.5 months.
Total drawings = ₹10,000 × 12 = ₹1,20,000
Average period = (12 + 1) ÷ 2 = 6.5 months
Interest on drawings:
= ₹1,20,000 × 8/100 × 6.5/12
= ₹5,200
NCERT (2026-27 edition):
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