Question

If a fixed amount is withdrawn on the first day of every quarter of a calendar year, the interest on total amount of drawings will be calculated for _______.

• A. 4.5 months
• B. 5.5 months
• C. 6 months
• D. 7.5 months

Answer 1

The correct option is D 7.5 months

If a fixed amount is withdrawn on first day of every quarter of the calendar year, the interest on the total amount of drawings will be calculated for 6.5 months. Average period will be calculated as:-

= Months left after first drawing + months left after last drawing

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2

= 12 + 3

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2

= 7.5 months

Explanation:-

Suppose if the first drawing is made on 1st January then 12 months will be left and in the last quarter October to December last drawing will be made on 1st October and 3 months will be left.