Mr. X a partner in a partnership firm withdraws Rs. 2,000 at the end of each month. Rate of interest is 5%. Interest on drawings at the end of the year will be

The correct answer is A. Rs. 1,200.

The total amount withdrawn by Mr. X in a year is 12 * 2000 = Rs. 24,000.
The interest on this amount at 5% is 24000 * 5/100 = Rs. 1200.

Option B is incorrect because it is the interest on half the amount withdrawn.
Option C is incorrect because it is the interest on a quarter of the amount withdrawn.
Option D is incorrect because it is the interest on three quarters of the amount withdrawn.