John Ibrahim, a partner in Ancient Tours and Travels withdrew money during the year ending March 31, 2020 from his capital account, for his personal use. He withdrew Rs. 3,000 per month at the beginning of the month. Calculate interest on drawings that should be charged from John Ibrahim, if the rate of interest charged on drawing is 9% per annum.

Total drawings during the year = Rs. 3,000 × 12 months = Rs. 36,000

Since the withdrawals are made at the beginning of each month, the average period for which the drawings remain with the partner needs to be calculated.

For equal withdrawals at the beginning of each month, the average period is calculated as:

Average Period = $\frac{(n + 1)}{2}$ months

where n = number of months = 12

Average Period = $\frac{(12 + 1)}{2}$ = $\frac{13}{2}$ = 6.5 months

---

Interest on Drawings = Total Drawings × Rate of Interest × $\frac{\text{Average Period}}{12}$

Interest on Drawings = Rs. 36,000 × $\frac{9}{100}$ × $\frac{6.5}{12}$

= Rs. 36,000 × 0.09 × 0.5417

= Rs. 1,755

The formula uses (n+1)/2 instead of n/2 because withdrawals at the beginning of the month mean each withdrawal is with the partner for a longer period compared to withdrawals made at the end of the month.

Correct Option: 2 (Rs. 1,755)