In a partnership firm a partner withdrew 5 000 per month on the first day of every month during the ...........

In a partnership firm, a partner withdrew 5,000 per month on the first day of every month during the year for personal expenses. If interest on drawings is charged @ 6% p.a. the interest charged will be :

3,600

1,950

1,800

1,650

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Explanation:

- When a partner withdraws money consistently on the first day of each month, the interest is calculated on each month's withdrawing amount for different periods.

- For this situation, the withdrawn amounts of ?5,000 attract interest for different months: from 11 months (January withdrawal) down to 0 months (December withdrawal).

- The average period for these monthly withdrawals is calculated as 6.5 months.

- Interest Calculation:

- Total annual withdrawal = ?5,000 x 12 months = ?60,000

- Average period = 6.5 months out of 12 months = 6.5/12 years

- Interest = ?60,000 x 6/100 x 6.5/12 = ?1,950

- Answer: Option 2 - ?1,950