EMI Calculator

EMI Calculator is used to calculate the EMI (Equated Monthly Installment) and find out how much you need to pay every month towards your loan repayment

Equated Monthly Installment:
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Background Information

What does EMI mean?
A money lender gives a specific amount of money to the borrower with a condition that the amount borrowed is paid back with interest as monthly installments. These installments are given over a predetermined period of time by the borrower and are referred to as EMI.
Formula

EMI = [P x R x (1 + R) ^ N] / [(1 + R) ^ (N - 1)]

Where:-

• P - principal ( borrowed as a loan)
• R - rate of interest that is levied on the loan amount (monthly rate)
• N - tenure of repayment of the loan
Example
A person took a personal loan of Rs. 2 lakhs for 2 years at an interest of 20 % p.a. Divide the annual interest rate by the number of months in a year, i.e. 12, so monthly 20/12 = 1.66% per month. Now the 2-year loan tenure should be converted into months before integrating into the above formula i.e. 24 months.

According to the above formula:-

• EMI = [P x R x (1 + R) ^ N] / [(1 + R) ^ (N - 1)]
• EMI = [2,00,000 x 1.66 / 100 x (1 + 1.66 / 100) ^ 24 / [(1 + 1.66 / 100) ^ 24 - 1)
• EMI = Rs. 10, 179
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