Ravi takes a loan of Rs. 40,000 at an interest of 12% per annum for a period of 4 year, then EMI by using flat method is :

Rs. 1233.33

The correct answer is Option (2) → Rs. 1233.33

EMI is,

$EMI=\frac{\text{Principal + Total Interest}}{\text{Loan Tenure (Months)}}$

Now,

Total Interest = Principal × Rate × Time

$=40,000×\frac{12}{100}×4$

$=19,200$

$∴EMI=\frac{40,000+19,200}{48}$

$≃1233.33$