Gopal availed a Term Loan of ₹ 10 lakhs for 'Repairs and Paintings' of Existing House from M/s XYZ Bank. The Bank offered a Term Loan with an Annual Interest Rate of 7.2% and the Tenure of the Loan is 10 Years. Calculate

To calculate the EMI (Equated Monthly Installment), we use the formula: EMI = P × R × (1 + R)^N / [(1 + R)^N – 1] Where: P = Principal Loan Amount = ₹ 10,00,000 R = Monthly Interest Rate = Annual Interest Rate / 12 / 100 = 7.2% / 12 / 100 = 0.072 / 12 = 0.006 N = Number of Monthly Installments = Tenure in Years × 12 = 10 years × 12 = 120 months Now, substitute the values into the formula: EMI = 10,00,000 × 0.006 × (1 + 0.006)^120 / [(1 + 0.006)^120 – 1] EMI = 10,00,000 × 0.006 × (1.006)^120 / [(1.006)^120 – 1] First, calculate (1.006)^120: (1.006)^120 ≈ 2.05099 Now, substitute this back into the EMI formula: EMI = 10,00,000 × 0.006 × 2.05099 / (2.05099 – 1) EMI = 6,000 × 2.05099 / 1.05099 EMI = 12305.94 / 1.05099 EMI ≈ 11,709.99 Rounding to the nearest whole number, EMI = ₹ 11,710. Hence, Mr. Gopal will be paying the EMI of ₹ 11,710 every month for 10 years. Some Banking Institutions may show the Break-up between the Principal Amount and Interest Rates to help the Borrowers to Assess EMI Payments.