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Equal monthly instalments needed to repay Rs.10000 in 1 year at 12% per annum approximately equal
ARs.800
BRs.888
CRs.850
DRs.900
Answer & Solution
Correct answer: B. Rs.888
1. EMI = P * r * (1 + r)^n / ((1 + r)^n - 1) where r is monthly rate.
2. Monthly r = 0.12/12 = 0.01; n = 12 months.
3. (1.01)^12 = 1.1268; numerator = 10000 * 0.01 * 1.1268 = 112.68.
4. EMI = 112.68 / 0.1268 = 888.5, approximately Rs.888.
_Source: ICAI BoS Foundation Paper 3, Ch 4 'Math of Finance', p.15_
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