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If A maintained Rs 50000 for six months and Rs 70000 for the next six months what is the average capital?

Answer and explanation

Correct answer: Rs 60000

The direct answer is option A: Rs 60000. Average capital must be time-weighted when different amounts are maintained for different periods. Here, Rs 50000 is maintained for six months and Rs 70000 for the next six months. Since both periods are equal, each amount receives equal weight. The total capital-months are Rs 50000 × 6 = Rs 300000 and Rs 70000 × 6 = Rs 420000. Their total is Rs 720000 for 12 months. Average capital is therefore Rs 720000 ÷ 12 = Rs 60000. Because the periods are equal, the same result can be found by taking the simple average: \\(50000+70000\\) ÷ 2 = Rs 60000. Option A is correct. Option B, Rs 70000, is only the later capital, not the average for the whole year. Option C, Rs 50000, is only the earlier capital. Option D, Rs 120000, adds the two amounts but ignores that an average is required. Memory cue: equal time periods mean add the amounts and divide by two; unequal periods require time weighting.

Related tags

Average CapitalNumericalTime Weighted

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