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 :
Answer & explanation
Correct answer: option 2
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
$=40,000×\frac{12}{100}×4$
$=19,200$
$∴EMI=\frac{40,000+19,200}{48}$
$≃1233.33$