Ms Rajni takes a loan of Rs. 25,00,000 at an interest of 10% per annum for a period of 20 years. Her EMI using a flat rate method is:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs. 31,250
In the flat rate method, interest is charged on the whole principal for the whole period:
\( \displaystyle I=P\times r\times n \)
\( \displaystyle I=25{,}00{,}000\times 0.10\times 20=50{,}00{,}000 \)
Total amount to be repaid:
\( \displaystyle P+I=25{,}00{,}000+50{,}00{,}000=75{,}00{,}000 \)
The number of monthly instalments is 20 × 12 = 240:
\( \displaystyle \text{EMI}=\frac{P+I}{\text{number of months}} \)
\( \displaystyle \text{EMI}=\frac{75{,}00{,}000}{240}=31{,}250 \)
Her EMI is Rs. 31,250.
CBSE Applied Mathematics (Class XII):
Methods of Calculation of EMI or Instalment
