Question

How much more money would be paid on a loan of Rs. 20,00,000 taken out over 20 years compared to the same loan taken over a period of 15 years?

• A. Rs. 3,00,000
• B. Rs. 4,25,000
• C. Rs. 5,50,000
• D. Rs. 6,12,000
• A. Rs. 22,50,000
• B. Rs. 37,95,000
• C. Rs. 45,30,000
• D. Rs. 55,70,000
• A. Rs. 1,30,000
• B. Rs. 2,40,000
• C. Rs. 2,24,000
• D. Rs. 1,26,000
• A. Rs. 4,54,000
• B. Rs. 4,74,000
• C. Rs. 5,67,000
• D. Cannot be assessed

Answer 1

The Correct Option is D

The correct option is (D): Rs. 6,12,000
Explanation: To determine how much more money would be paid on a loan of Rs. 20,00,000 taken out over 20 years compared to the same loan taken over a period of 15 years, we can use the information from the table.
Step 1: Find monthly repayments for each period
From the table:
- For a loan of Rs. 20,00,000:
- 15 years: Monthly repayment = Rs. 20,600
 - 20 years: Monthly repayment = Rs. 18,000
Step 2: Calculate total payments for each period
Total Payment for 15 Years
\[\text{Total Payment} = \text{Monthly Repayment} \times \text{Number of Months}\]
\[\text{Total Payment (15 years)} = 20,600 \times 15 \times 12 = 20,600 \times 180 = Rs. 37,08,000\]
Total Payment for 20 Years
\[\text{Total Payment (20 years)} = 18,000 \times 20 \times 12 = 18,000 \times 240 = Rs. 43,20,000\]
Step 3: Calculate the difference in total payments
\[\text{Difference} = \text{Total Payment (20 years)} - \text{Total Payment (15 years)}\]
\[\text{Difference} = 43,20,000 - 37,08,000 = Rs. 6,12,000\]
Conclusion
The amount of money paid more on a loan of Rs. 20,00,000 taken over 20 years compared to 15 years is Rs. 6,12,000.

Answer 2

The correct option is (B): Rs. 37,95,000
Explanation:
To find the total amount repaid over 25 years on a loan of Rs. 15,00,000, we can refer to the table for the monthly repayment amount.
Step 1: Find the monthly repayment for Rs. 15,00,000 over 25 years
From the table:
- For a loan of Rs. 15,00,000 over 25 years, the monthly repayment is Rs. 12,650.
Step 2: Calculate the total payments over 25 years
\[\text{Total Payment} = \text{Monthly Repayment} \times \text{Number of Months}\]
\[\text{Total Payment} = 12,650 \times 25 \times 12 = 12,650 \times 300\]
\[\text{Total Payment} = 37,95,000\]
Conclusion
The total amount repaid over 25 years on a loan of Rs. 15,00,000 is Rs. 37,95,000.

Answer 3

The correct option is (B): Rs. 2,40,000
Explanation:To determine how much the total amount paid on a loan of Rs. 15,00,000 over 20 years is reduced by lowering the monthly repayment to Rs. 12,500, we can follow these steps:
Step 1: Find the original monthly repayment for Rs. 15,00,000 over 20 years
From the table:
- For a loan of **Rs. 15,00,000 over 20 years, the monthly repayment is Rs. 13,500.
Step 2: Calculate the total payment with the original monthly repayment
\[\text{Original Total Payment} = 13,500 \times 20 \times 12\]
\[\text{Original Total Payment} = 13,500 \times 240 = 32,40,000\]
Step 3: Calculate the total payment with the reduced monthly repayment
\[\text{Reduced Total Payment} = 12,500 \times 20 \times 12\]
\[\text{Reduced Total Payment} = 12,500 \times 240 = 30,00,000\]
Step 4: Calculate the reduction in total amount paid
\[\text{Reduction} = \text{Original Total Payment} - \text{Reduced Total Payment}\]
\[\text{Reduction} = 32,40,000 - 30,00,000 = 2,40,000\]
Conclusion
The reduction in the total amount paid on the loan over the full period is Rs. 2,40,000.

Answer 4

The correct option is (B): Rs. 4,74,000
Explanation: To calculate the cumulative financial impact of the two loan options, we'll need to determine the total repayments for both scenarios and then find the difference.
Step 1: Loan of Rs. 10,00,000 over 15 years
From the table, the monthly repayment for a loan of **Rs. 10,00,000** over **15 years** is **Rs. 10,300**.
Total repayment for Rs. 10,00,000:
\[\text{Total Repayment} = 10,300 \times 15 \times 12\]
\[\text{Total Repayment} = 10,300 \times 180 = 18,54,000\]
Step 2: Loan of Rs. 15,00,000 over 10 years
From the table, the monthly repayment for a loan of Rs. 15,00,000 over 10 years is Rs. 19,400.
Total repayment for Rs. 15,00,000:
\[\text{Total Repayment} = 19,400 \times 10 \times 12\]
\[\text{Total Repayment} = 19,400 \times 120 = 23,28,000\]
Step 3: Calculate the cumulative financial impact
Impact:
\[\text{Cumulative Financial Impact} = \text{Total Repayment (15 years)} - \text{Total Repayment (10 years)}\]
\[\text{Cumulative Financial Impact} = 23,28,000 - 18,54,000 = 4,74,000\]
Conclusion
The cumulative financial impact of taking the larger loan over a shorter period is Rs. 4,74,000.