What will be the average period used for calculation of Interest on Drawing, when money is withdrawn in the middle of the every month?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 6 Months
The average period is the time, on average, for which the money withdrawn stays out of the firm in the year. When the money is withdrawn in the middle of every month, the first drawing is out for 11.5 months and the last for 0.5 month, so the average is (11.5 + 0.5) ÷ 2 = 6 months.
NCERT (2026-27 edition):
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