Question

Vibhuti bought a car worth ₹10,25,000 and made a down payment of ₹4,00,000. The balance is to be paid in 3 years by equal monthly installments at an interest rate of 12% p.a. The EMI that Vibhuti has to pay for the car is:
(Use \( (1.01)^{-36} = 0.7 \))

• A. ₹20,700.85
• B. ₹27,058.87
• C. ₹20,833.33
• D. ₹25,708.89

Answer 1

The Correct Option is D

The formula for EMI is:

\[ EMI = \frac{P \cdot r \cdot (1 + r)^n}{(1 + r)^n - 1}, \]

where:

\(P = 10,25,000 - 4,00,000 = 6,25,000\),   \(r = \frac{12}{100 \times 12} = 0.01\),   \(n = 36 \text{ (months)}\).

Substitute the values:

\[ EMI = \frac{6,25,000 \cdot 0.01 \cdot (1.01)^{36}}{(1.01)^{36} - 1}. \]

Using \((1.01)^{36} = 1.7\):

\[ EMI = \frac{6,25,000 \cdot 0.01 \cdot 1.7}{1.7 - 1} = \frac{6,250 \cdot 1.7}{0.7}. \]

Simplify:

\[ EMI = \frac{10,625}{0.7} = 25,708.89. \]

Thus, the EMI is Rs. 25,708.89.