Suresh has taken a loan of Rs. 4 lakhs from the bank to purchase a car. The annual interest rate on loan is 15% and the loan is to be paid in 6 years in monthly instalments. The bank retained the papers of the car as collateral. Analyse the loan information given above and specify the mode of repayment.
Answers
Given : Suresh has taken a loan of Rs. 4 lakhs from the bank to purchase a car. The annual interest rate on loan is 15% and the loan is to be paid in 6 years in monthly instalments. S
To Find : EMI and mode of repayment.
Solution:
P = 400000
R = 15 % per annum = 1.25 % per month
n = 6 years = 72 months
EMI Formula = [P x (R/100) x (1+(R/100)ⁿ]/[(1+(R/100)ⁿ-1]
= 400000* (1.25/100) * 1.0125⁷²/(1.0125⁷² - 1)
= 5000 * 2.44592/1.44592
= 8,458
Each monthly payment = 8458
mode of repayment = PDC (post Dated cheque ) or NEFT mandate for auto debit
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