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EMI, CAGR & Depreciation · Question 15 of 66

Question 15

EasyOriginal question

A loan of ₹2,00,000 is charged 1% a month on the reducing balance. How much interest is in the first EMI?

Options for question 15

Show the answer and explanation
CorrectNot quiteAnswer B

Correct answer: B

Explanation

  1. In the first month the whole loan is still owed.

  2. Interest =2,00,000×0.01=2,000= 2{,}00{,}000 \times 0.01 = 2{,}000 rupees.

Worth noting

₹24,000 is 12% for a whole year, not one month's interest.

Concept
How the first instalment splits
Typical time
60 s
Your time
—
The rule this testsEMI by the reducing-balance method
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