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 :

₹12,250

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

$=11,76,000$

$EMI=\frac{Total\, Repayment}{Loan\,Tenure(in\,months)}$

$=\frac{11,76,000}{96}=12,500$