Suppose you earn ₹100 on the first day of every month and run down this balance evenly over the rest of the month, then your cash balances (in ₹) at the beginning and the end of the month are:
Show answer & explanation
Correct answer: A
Explanation
The Correct Answer is Option 1, i.e. 50 and 0
You start with ₹100 on Day 1 and spend it evenly over the month. On average, you use up an equal amount daily. So halfway through the month, your balance is ₹50. By the end, it becomes ₹0. Thus, your beginning balance is ₹50 (average cash held), and end balance is ₹0.