Ram takes a personal loan of Rs. 5,00,000 at the rate of 12% per annum for 3 years. His EMI using a flat rate method is
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rs. 18,888.89
Under the flat rate method, interest is charged on the full loan for the whole period.
Interest = 5,00,000 × 12% × 3 = Rs. 1,80,000
Total amount = 5,00,000 + 1,80,000 = Rs. 6,80,000
Number of instalments = 3 × 12 = 36
\( \displaystyle \text{EMI}=\frac{680000}{36}=18888.89 \)
So the EMI is Rs. 18,888.89.
CBSE Applied Mathematics (Class XII):
Methods of Calculation of EMI or Instalment
