Kavya takes a personal loan of Rs. 10,00,000 at the rate of 12% per annum for 5 years, then the EMI by using flat rate method is
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rs. 26,666.66
In the flat rate method, simple interest is charged on the whole principal for the whole period, and the total (principal + interest) is repaid in equal monthly instalments.
\( \displaystyle \text{Interest} = \frac{1000000 \times 12 \times 5}{100} = 600000 \)
\(\text{Total amount} = 1000000 + 600000 = 1600000\)
The number of monthly instalments is \(5 \times 12 = 60\), so
\( \displaystyle \text{EMI} = \frac{1600000}{60} = 26666.66\ldots \)
So the EMI is Rs. 26,666.66.
CBSE Applied Mathematics (Class XII):
Methods of Calculation of EMI or Instalment
