Ram takes a loan of Rs. 5,00,000 from a bank at an interest rate of 6% per annum for 10 years. He wants to pay back the loan in equated monthly installments, then his EMI by using flat rate method is :
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rs. 6666.67
In the flat rate method, interest is charged on the full principal for the whole period, and the total is divided equally over all the months.
\( \displaystyle \text{Interest}=\frac{P\times R\times T}{100} \)
\( \displaystyle =\frac{500000\times 6\times 10}{100} \)
\( \displaystyle =300000 \)
\( \displaystyle \text{Total amount}=500000+300000=800000 \)
\( \displaystyle \text{Number of months}=10\times 12=120 \)
\( \displaystyle \text{EMI}=\frac{800000}{120}=6666.67 \)
His EMI is Rs. 6666.67.
CBSE Applied Mathematics (Class XII):
Methods of Calculation of EMI or Instalment
