Question

Rakesh has applied for a loan of Rs.300000. He
has two options, the first is a fixed rate of compound
interest of 6% for three years and the other is
a floating rate of 7% for the first year, 6% for
the second year and 5% for the third year. If
he repays the loan after three years, then which
option is beneficial to Rakesh and by how much?
1] Fixed Rate ,Rs 318
2] Floating Rate ,Rs 318
3] Floating Rate ,Rs31.8​

Answer 1

Answer:

the second option would be beneficial

Step-by-step explanation:

as in second option the the interest he pays would be decreasing by one percent each year but in the first the option the interest would be the same and as we know that the fixed rate and the float rate are both same