Question

Daksh and Moksh were partners in a firm. Moksh withdrew a fixed amount at the end of every quarter for the year ended 31^st March, 2024. Interest on drawings is charged at 10% p.a. Interest on Moksh’s drawings was charged for _________ months.
 

• A. 6
• B. 7.5
• C. 4.5
• D. 3

Hint:

For quarterly drawings made at the end of each quarter, use the average period formula to compute interest: \( \frac{9 + 6 + 3 + 0}{4} = 4.5 \) months.

Answer 1

The Correct Option is C

Moksh withdrew a fixed amount at the end of every quarter.
The quarters in a financial year ending on 31^st March are:
1^st quarter: June 30
2^nd quarter: September 30
3^rd quarter: December 31
4^th quarter: March 31
Since the drawings are made at the end of each quarter, the average period method is used.
For end-of-quarter withdrawals, the interest is charged for the following average durations:
- 1^st quarter (June 30): 9 months
- 2^nd quarter (Sept 30): 6 months
- 3^rd quarter (Dec 31): 3 months
- 4^th quarter (Mar 31): 0 months
Average period = \( \frac{9 + 6 + 3 + 0}{4} = \frac{18}{4} = 4.5 \text{ months} \)
Therefore, interest on drawings is calculated for 4.5 months.