Select the conditions required for computing interest on drawings using average period method:

A. Equal amount of drawings
B. Fixed interval of drawings
C. Varying amounts of drawings
D. Different interval of drawings
E. Rate of Interest

Choose the correct answer from the options given below:

A, B and E only

The correct answer is Option (4) - A, B and E only.

The average method is used when the partners withdraw regular drawings means the amount withdrawn is uniform and the time interval between the two drawings is also uniform.

Formula=Total drawings X Rate/100 X Average period/12

And Average period = (Months left after Ist drawing + Months left after last drawing)/2