| List-I (Equal amount of drawings made) | List-II (Number of month for which interest calculated) |
|---|---|
| (A) At the end of each half year | (I) 4.5 months |
| (B) At the beginning of each quarter | (II) 6.5 months |
| (C) At the beginning of each month | (III) 7.5 months |
| (D) At the end of each quarter | (IV) 3 months |
(A) - (III), (B) - (II), (C) - (I), (D) - (IV)
To determine the correct calculation of interest on drawings, it is necessary to understand how interest accrues based on the timing of drawings within business periods. For consistent drawing amounts, interest is computed according to the duration each drawing remains within the business.
(A) Drawings at the end of each half-year:
When drawings are made at the conclusion of each six-month period, interest is computed over an average of 4.5 months. This is derived by considering that half a year (6 months) will have elapsed. As the drawing occurs at the end of this period, the interest calculation period is adjusted for the remainder of the current period, resulting in 4.5 months.
(B) Drawings at the beginning of each quarter:
Drawings initiated at the commencement of each three-month quarter will remain in the business for the entire 3-month duration of that quarter. Consequently, interest is calculated for an average period of 6.5 months.
(C) Drawings at the beginning of each month:
For drawings made at the start of each monthly period, interest is calculated over an average of 7.5 months. This accounts for each drawing remaining in the business for its respective full month, plus the subsequent months until the period-end.
(D) Drawings at the end of each quarter:
When drawings are made at the close of each quarter, they remain in the business for the subsequent 3 months, and this duration is used for interest calculation.
The accurate pairings are as follows:
Therefore, the correct alignment is: (A) - (III), (B) - (II), (C) - (I), (D) - (IV)