Mr. X takes a personal loan of ₹10,00,000 at the rate of 12% per annum for 6 years. Calculate his EMI by using flat rate method
Answer & explanation
Correct answer: option 1
$\text{Principal}=10,00,000$
$\text{Rate}=12\%$ per annum
$\text{Time}=6$ years
$\text{Interest (flat rate)}=P\times R\times T$
$=10,00,000\times0.12\times6$
$=7,20,000$
$\text{Total amount to be repaid}$
$=10,00,000+7,20,000$
$=17,20,000$
$\text{Number of months}=6\times12=72$
$\text{EMI}=\frac{17,20,000}{72}$
$=23,888.89$
The EMI is approximately ₹23,889 per month.