Question

If a fixed amount is withdrawn on the last day of every month of a calendar year, the interest on the total amount of drawings will be calculated for _________.

• A. 4.5 months
• B. 5.5 months
• C. 6 months
• D. 6.5 months

Answer 1

The correct option is B 5.5 months

If a fixed amount is withdrawn on last day of every month of the calendar year, the interest on the total amount of drawings will be calculated for 5.5 months. Average period will be calculated as:-

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

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2

= 11 + 0

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2

= 5.5 months.