A person takes a home loan of Rs. 1200000 from a bank at an interest rate of 12% per annum for 10 years. The EMI under flat rate system is,
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rs. 22000
Under the flat rate system, simple interest is charged on the whole loan for the whole period, and the total is repaid in equal monthly instalments.
\( \displaystyle \text{Interest} = \frac{1200000 \times 12 \times 10}{100} = 1440000 \)
\(\text{Amount to repay} = 1200000 + 1440000 = 2640000\)
The number of monthly instalments is 10 × 12 = 120.
\( \displaystyle \text{EMI} = \frac{2640000}{120} = 22000 \)
CBSE Applied Mathematics (Class XII):
Methods of Calculation of EMI or Instalment
