Shyam bought a car in 2023 worth ₹7 lakh. He made a down payment of ₹2.5 lakh and took a loan for the rest of the amount at the rate 12% p.a. for four years. The monthly EMI paid by Shyam in:
(given (1.01)48 = 1.6122)
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → ₹ 11,850.75
$\text{Cost} = 700000,\;\; \text{Down payment} = 250000$
$\text{Loan} = 450000$
$r = 12\% \Rightarrow \text{monthly rate} = \frac{12}{12} = 1\% = 0.01$
$n = 4 \times 12 = 48$
$\text{EMI} = \frac{P r (1+r)^n}{(1+r)^n - 1}$
$= \frac{450000 \cdot 0.01 \cdot 1.6122}{1.6122 - 1}$
$= \frac{4500 \cdot 1.6122}{0.6122}$
$= \frac{7254.9}{0.6122} \approx 11860$
The monthly EMI is approximately ₹11,860.