Question

When time of withdrawals is not mentioned, interest on drawing is charged for

• A. 5½ months
• B. 6 months
• C. 6½ months
• D. 12 months

Hint:

No dates are given, so use the average period for evenly spread drawings.

Answer 1

The Correct Option is B

Step 1: Recall the rule for undated drawings:
When the time of withdrawals is not mentioned, the drawings are assumed to be spread evenly over the year, so interest is charged on the total drawings for an average period of 6 months.

Step 2: Check the other options:
5½ months applies when equal amounts are drawn at the end of every month, 6½ months applies when equal amounts are drawn at the beginning of every month, and 12 months would apply only if the whole amount were drawn on the first day of the year.

Final Answer:
Interest is charged for 6 months.