Kindly help my query.
There is case where Rs. 20 lacs loan was taken, with INTEREST REPAYMENT @ 30% per annum. If any month(s) interest payment was delayed/defaulted, an additional amount of 30% per annum (i.e., 2.5% per month) is to be added to that corresponding month's interest and upon which the interest in calculated. This process would lead to an accumulated Interest for 5 MONTHS is Rs. 268137.
E.g., 20lacs x 30% / 12 = 50,000
Addition of 2.5% = 51,250, upon which interest is Rs. 52,531
and so on, until 5th month, which amounted to Rs. 2,68,137.
But what if,
Rs. 50,000 for 5 months = 2,50,000, upon which addition of 2.5% for 5 month = Rs. 2,81,250.
Which one is correct ?
Which one should be opted ?