Gitansh withdrew Rs. 5000 pm at the end of every month for ten months. Interest on drawing is charged @ 10% p.a. Gitansh's interest on drawings is :
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rs. 1875
When a fixed amount is withdrawn at the end of each month, interest is charged for the average period the drawings stay out, from each withdrawal to the end of the period. The first of the ten withdrawals is out for 9 months and the last for 0 months.
Total drawings = Rs. 5,000 × 10 = Rs. 50,000
Average period = (9 + 0) ÷ 2 = 4.5 months
Interest on drawings = Rs. 50,000 × 10/100 × 4.5/12 = Rs. 1,875
Check by products: Rs. 5,000 × (9 + 8 + … + 1 + 0) = Rs. 5,000 × 45 = Rs. 2,25,000 for one month; Rs. 2,25,000 × 10/100 × 1/12 = Rs. 1,875.
NCERT (2026-27 edition):
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