When the partners withdraw different amounts of money at different time intervals, the interest is calculated using the following formula:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Sum of Products X Rate/100 X 1/12
Under the product method, each withdrawal is multiplied by the months it stayed out, so the products are in rupee-months. The rate is a yearly rate, which is why the total is multiplied by 1/12. The factor 6/12 belongs to the shortcut for equal amounts drawn at regular intervals, where an average period is used instead of products.
NCERT (2026-27 edition):
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