Ankur takes a personal loan of Rs. 3,00,000 at the rate of 12% per annum for two years. His EMI using a flat rate method will be:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs.15,500
In the flat rate method, interest is charged on the whole principal for the whole term:
\( \displaystyle I=P\times r\times t \)
\( \displaystyle =3{,}00{,}000\times 0.12\times 2=72{,}000 \)
\( \displaystyle \text{Total amount}=3{,}00{,}000+72{,}000=3{,}72{,}000 \)
\( \displaystyle \text{Number of monthly instalments}=2\times 12=24 \)
\( \displaystyle \text{EMI}=\frac{3{,}72{,}000}{24}=15{,}500 \)
So the EMI is Rs. 15,500.
Why the other options are incorrect
Option (1) Rs.36,000 — Incorrect. Rs. 36,000 is the interest for one year, not a monthly instalment.
Option (2) Rs.15,000 — Incorrect. Rs. 15,000 is the principal alone divided by 24; the interest has been left out.
Option (4) Rs.18,600 — Incorrect. The EMI is Rs. 15,500, not Rs. 18,600.
CBSE Applied Mathematics (Class XII):
Methods of Calculation of EMI or Instalment
