Vibhuti bought a car worth ₹10,25,000 and made a down payment of ₹4,00,000. The balance is to be paid in 3 years by equal monthly installments at an interest rate of 12% p.a. The EMI that Vibhuti has to pay for the car is: {Use $(1.01)^{-36}=0.7$}
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → ₹20,833.33
$EMI = \frac{P \cdot r \cdot (1 + r)^n}{(1 + r)^n - 1}$
Principal = $10,25,000-4,00,000=6,25,000$
Monthly Interest Rate = $\frac{\text{Annual Rate}}{12}=\frac{12}{100×12}=0.01$
Total number of monthly installments = $n=12×3=36$
$EMI=\frac{6,25,000×\frac{1}{100}×(1+0.01)^{36}}{(1+0.01)^{36}-1}$
$=\frac{\frac{6250}{0.7}}{\frac{1}{0.7}-1}=\frac{\frac{6250}{0.7}}{\frac{0.3}{0.7}}$
$=\frac{6250}{3}×10=20,833.33$