Multiple choice

Calculate the interest on drawings made by a partner of Rs. 10000 at the beginning of each quarter at the rate of interest equal to 6% p.a.

  1. Rs. 900

  2. Rs. 1200

  3. Rs. 1500

  4. Rs. 2400
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Total drawings = 10000 * 4 = 40000. Interest on drawings at the beginning of each quarter uses an average period of 7.5 months. Interest = 40000 * 0.06 * (7.5/12) = 40000 * 0.06 * 0.625 = 1500.

AI explanation

Using the average period method for drawings made at the beginning of each quarter, the average period equals (12 + 3) / 2, which is 7.5 months or 7.5/12 years. The interest is calculated as 10000 * 4 * (6/100) * (7.5/12), since the total annual drawing is 40000 rupees. Solving this gives an interest of 1500 rupees.

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