Question

Sanjay takes a personal loan of ₹6,00,000 at the rate of 12% per annum for 'n' years. The EMI using the flat rate method is ₹16,000. The value of 'n' is:

• A. 3
• B. 6
• C. 5
• D. 4

Answer 1

Answer: (C)

5

Answer 2

Solution: The flat-rate EMI is calculated using the formula:

$EMI = \frac{Loan Amount + Total Interest}{Number of Months}$

Total interest calculation The total interest under the flat rate method is:

$Total Interest = Loan Amount \times Rate of Interest \times Time (in years)$

Here, the loan amount is 6,00,000, the rate of interest is 12% = 0.12, and the time is $n$ years. So:

$Total Interest = 6,00,000 \times 0.12 \times n = 72,000 \times n$

EMI calculation The EMI formula becomes:

$16,000 = \frac{6,00,000 + 72,000n}{12n}$

Multiply through by 12n to eliminate the denominator:

$16,000 \times 12n = 6,00,000 + 72,000n$

$1,92,000n = 6,00,000 + 72,000n$

Simplify:

$1,92,000n - 72,000n = 6,00,000$

$1,20,000n = 6,00,000$

Solve for n:

$n = \frac{6,00,000}{1,20,000} = 5$

Final Answer: The value of n is:

$5$