Subodh took a loan of Rs. 10,00,000 at 14% annual interest rate for 8 years. His equated monthly instalment under flat rate system is :
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs. 22083.33
In the flat rate system, simple interest is charged on the whole loan for the whole period, and the total is divided equally over all the months.
Interest:
\( \displaystyle I = \frac{1000000 \times 14 \times 8}{100} = 1120000 \)
Total amount to repay:
\(1000000 + 1120000 = 2120000\)
Number of months = 8 × 12 = 96, so
\( \displaystyle \text{EMI} = \frac{2120000}{96} \approx 22083.33 \)
So the EMI is Rs. 22083.33.
CBSE Applied Mathematics (Class XII):
Methods of Calculation of EMI or Instalment
