M and N are partners in a firm and agree that an interest @12% per annum should be charged on drawings. M draws ₹20,000 per month at the beginning of each month. The amount of interest to be charged from M is:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs. 15,600
When the same amount is drawn at the beginning of every month, the first drawing stays out for 12 months and the last for 1 month, so interest is charged on the total drawings for an average period of 6½ months.
Average period = (12 + 1) / 2 = 6.5 months
Total drawings = Rs. 20,000 × 12 = Rs. 2,40,000
Interest on drawings = Rs. 2,40,000 × 12/100 × 6.5/12
Interest on drawings = Rs. 15,600
Drawings at the end of each month would give 5½ months (Rs. 13,200), and drawings in the middle of each month 6 months (Rs. 14,400); both figures sit among the options, so read the timing of the drawings first.
NCERT (2026-27 edition):
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