Financial Management Decision

When you took the loan, 

3,00,000/ 3rd year annuity factor @ 6.85= interest+principle repayments/36 months= EMI

when you give a loan 

Quarterly Interest= 3 lakhs* 6.3= Quarterly interest income

quarterly monthly income * 6.3= Quarterly interest income.

you have to have to do PV amortisation for both and find out how much the lump sum earns and how much you have to repay back. Online calculators are available. 

Forgot, if your paying only interest on borrowed money then calculate interest cash outflows discounted to PV at 6.85

Use 12 months instead of 36 in the denominator value. Cheers

Thank you for the answer.

Your welcome, the main idea is how much interest your paying and how much your earning and the gain. From your scenario, you will get 320166 approximately without discounting and 334650 is what you will pay wi5out discounting used. Considering you have benefits like interest allowance on loans, you can break even or marginally get a gain. 

But according to my calculation:

EMI = ₹ 9,243/-

Total EMI Payments = ₹ 3,32,748/-

FD Maturity Value = ₹ 3,61,879/- (quarterly compounded cumulative value)

At what rate should i discount 6.3% or 6.85%?

What present values do you get?

I also did it online just now and your numbers are tallying, I made rough calculation above. You need to discount when you want to know future value in PV. 

You know, I sorted this problem and the difference in your calculations and mine and online arises due to discount rates used. That is why I don't like to analyse real life finance questions because there definitely will be loads of asymmetric information related to market rates. I have attached the screen shots for your convenience. Loan is sorted out my way and online calculator way. 

The second part of the problem is here. all the best

Similarly, the compounding must be one done on monthly interest rate calculations. It is not mentioned anywhere.