Question

If a fixed amount is withdrawn on the middle day of every quarter of a calendar year, the interest on total amount of drawings will be calculated for ________.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. 6.5 months

Answer 1

The correct option is C 6 months

If a fixed amount is withdrawn on middle day of every quarter of the calendar year, the interest on the total amount of drawings will be calculated for 6 months. Average period will be calculated as:-

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

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2

= 10.5 + 1.5

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2

= 6 months

Explanation:-

Suppose if the first drawing is made on ( 1st quarter January to March) 15th February then 10.5 months will be left and in the last quarter October to December last drawing will be made on 15th November and 1.5 months will be left.