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Eisemi P Is Principal Loan Amount R Is Rate of Interest Calculated On Monthly Basis. (I.E., R Rate of Annual Interest/12/100. If Rate of

Equated Monthly Installment – EMI for short – is the amount payable every month to the bank or any other financial institution until the loan amount is fully paid off. It consists of the interest on loan as well as part of the principal amount to be repaid. The sum of principal amount and interest is divided by the tenure, i.e., number of months, in which the loan has to be repaid. This amount has to be paid monthly

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51 views2 pages

Eisemi P Is Principal Loan Amount R Is Rate of Interest Calculated On Monthly Basis. (I.E., R Rate of Annual Interest/12/100. If Rate of

Equated Monthly Installment – EMI for short – is the amount payable every month to the bank or any other financial institution until the loan amount is fully paid off. It consists of the interest on loan as well as part of the principal amount to be repaid. The sum of principal amount and interest is divided by the tenure, i.e., number of months, in which the loan has to be repaid. This amount has to be paid monthly

Uploaded by

GirijaKaushik
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Equated Monthly Installment EMI for short is the amount payable every month to the bank or any

other financial institution until the loan amount is fully paid off. It consists of the interest on loan as
well as part of the principal amount to be repaid. The sum of principal amount and interest is divided
by the tenure, i.e., number of months, in which the loan has to be repaid. This amount has to be paid
monthly. The interest component of the EMI would be larger during the initial months and gradually
reduce with each payment. The exact percentage allocated towards payment of the principal
depends on the interest rate. Even though your monthly EMI payment wont change, the proportion
of principal and interest components will change with time. With each successive payment, youll pay
more towards the principal and less in interest.
Heres the formula to calculate EMI:

where
E is EMI
P is Principal Loan Amount
r is rate of interest calculated on monthly basis. (i.e., r = Rate of Annual interest/12/100. If rate of
interest is 10.5% per annum, then r = 10.5/12/100=0.00875)
n is loan term / tenure / duration in number of months

EMI calculator is easy to use, intuitive to understand and is quick to perform. You can calculate EMI
for home loan, car loan, personal loan, education loan or any other fully amortizing loan using this
calculator.
Enter the following information in the EMI calculator:

Principal loan amount you wish to avail (rupees)

Loan term (months or years)

Rate of interest (percentage)

EMI in advance OR EMI in arrears

And the calculator will give you the emi calculation..

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