Aashish withdrew Rs. 10,000 per month from the firm for his personal use during the year ending March 31, 2017. What will be the amount of interest if the amount is withdrawn at the beginning of each month and rate of interest on drawings is 8% per annum?

Rs. 5,200

The correct answer is Option (3) → Rs. 5,200.

Per month drawing = 10,000
Total drawings = 10,000 x 12
                     = 1,20,000
Rate of interest = 8% p.a.

When the amount is withdrawn at the beginning of each month. 
Ist drawing = 1st April, so months left after it are 12.
Last drawing = 1st March, so months left after it are 1.
Average Period = (No. of months left after 1 drawings + No. of months left after last drawings)/2
                         = (12+1)/ 2
                         = 6.5 months

Interest on drawings = Total drawings x (Rate of interest/100) x (Average period/12)
                                   = 1,20,000 x (8/100) x (6.5/12)
                                   = 5,200