A person borrowed a car loan of ₹6,00,000 from a bank at an interest rate of 12% per annum for 8 years. The EMI under flat rate system is :
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → ₹12,250
The flat rate interest is,
Total interest = Principal × Rate of interest × Time
$=6,00,000×0.12×8$
$=5,76,000$
Total repayment = Principal + Total interest
$=11,76,000$
$EMI=\frac{Total\, Repayment}{Loan\,Tenure(in\,months)}$
$=\frac{11,76,000}{96}=12,500$