Priya took a loan of ₹2,50,000 from a bank at the rate of 10% per annum for 5 years. Her EMI, using FLAT RATE METHOD, is :
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → ₹6250
Total interest = Principal × Rate × Time
$=2,50,000×\frac{10}{100}×5$
$=1,25,000$
Total Repayment = Principal + Total Interest
$= 2,50,000+1,25,000=3,75,000$
$EMI=\frac{\text{Total Repayment}}{\text{Number of Months}}=\frac{3,75,000}{5×12}$
$=₹6250$