A borrower pays an EMI of ₹22,920 per month for 12 months on a vehicle loan taken at 18% per annum. Find the l

Exercises · Q8

Q. A borrower pays an EMI of ₹22,920 per month for 12 months on a vehicle loan taken at 18% per annum. Find the loan amount.

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Here $\text{EMI}=₹22{,}920$ , annual rate $18\%$ so monthly rate $r=0.015$ , tenure $n=12$ months, and the loan amount $P$ is unknown.

Step 1 — Compute $(1+r)^n$ . $(1.015)^{12} = 1.195618$ .

Step 2 — Rearrange the EMI formula for $P$ .

P = \text{EMI}\times\frac{(1+r)^{n}-1}{r(1+r)^{n}} = 22{,}920\times\frac{0.195618}{0.015\times1.195618} = 22{,}920\times\frac{0.195618}{0.017934}

Step 3 — Evaluate.

$P \approx ₹2{,}50{,}000$ …

Q.A borrower pays an EMI of ₹22,920 per month for 12 months on a vehicle loan taken at 18% per annum. Find the loan amount.