B withdrew ₹3000 at the end of every month. Interest on drawings is 12% per annum. What will be the interest?

Correct answer: ₹1980

The direct answer is A, ₹1980. Since ₹3000 is withdrawn at the end of each month, the withdrawals are made after 1, 2, ..., 12 months have elapsed from the relevant yearly starting point. The average period is
(1+2+\cdots+12)/12=78/12=6.5
months if counting from the beginning of the year, but in the standard partnership-accounting convention for end-of-month drawings the average period is 5.5 months, because the first drawing remains invested for 11 months and the last for 0 months. Total drawings are
12\times3000=₹36000
. Interest is
₹36000\times12\%\times\frac{5.5}{12}=₹1980
. Hence A is correct. Option B, ₹2160, would use 6 months as the average period. Option C, ₹2340, uses a still longer period and overstates interest. Option D, ₹1800, uses 5 months and understates interest. The key is to use the average period, not twelve months for the entire amount. Memory cue: end-of-month monthly drawings generally use 5.5 months; beginning-of-month drawings use 6.5 months.