Mr. A took a loan of ₹300000 at 10% annual interest rate and paid ₹ 5000 as monthly installment under flat rate system. What is the term of the loan ?

10 years

The correct answer is Option (3) → 10 years

Monthly installment = $\frac{P+(P×r×t)}{n}$

P = Principal amount

r = Annual interest rate

t = term of loan in years

n = total number of payments

$∴5000=\frac{300000+(3000×0.10×t)}{12×t}$

$⇒5000×12t=300000+30000t$

$⇒30000t=300000$

⇒ t = 10 years