loan of INR 50 lakh was taken on a fixed rate. Two years later, the rates started falling and current floating rate is 11%. The borrower wants to switch his loan to floating rate, but the lender will charge 1% of the outstanding amount, INR 49 lakh. Taking EMI at Rs.1200 per lakh when the rate is 12.5% and Rs.1050 per lakh, when the rate is 11%, how long will it take the customer, to recover the cost of switching, if he goes for this option.
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loan of INR 50 lakh was taken on a fixed rate. Two years later, the rates started falling and current floating rate is 11%. The borrower wants to switch his loan to floating rate, but the lender will charge 1% of the outstanding amount, INR 49 lakh. Taking EMI at Rs.1200 per lakh when the rate is 12.5% and Rs.1050 per lakh, when the rate is 11%, how long will it take the customer, to recover the cost of switching, if he goes for this option.
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