A person takes a car loan of ₹9,00,000 at the rate of 12% annum for 5 years from a bank. The EMI under flat rate system is :
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → ₹24,000
Principal amount (P) = ₹9,00,000
Annual interest rate (R) = 12% = 0.12
Tenure (T) = 5 years
Total Interest = $P×R×T $
Total Interest = $9,00,000×0.12×5=₹5,40,000$
The EMI under the flat rate system is,
$EMI=\frac{Principal+Total\,interest}{Total\,Months}$
$=\frac{9,00,000+5,40,000×0.12×5}{60}$
$=₹24,000$