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EMI Calculator

Updated: Nov 5, 2018
EMI   FINANCE   INTEREST  
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.
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EMI:
..
Equated Monthly Installment

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 * (r / 100 / 12) * ((1 + r / 100 / 12) ^ n) / ((1 + r / 100 / 12) ^ n - 1)`

Where:-

  • p = loan amount
  • r = annual interest rate
  • n = loan tenure months
Example

A person took a personal loan of Rs. 4000000 for 240 months at an interest of 10% 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:-

  • `p * (r / 100 / 12) * ((1 + r / 100 / 12) ^ n) / ((1 + r / 100 / 12) ^ n - 1)`
  • `4,000,000 * (10 / 100 / 12) * ((1 + 10 / 100 / 12) ^ 240) / ((1 + 10 / 100 / 12) ^ 240 - 1)`
  • `4,000,000 * (0.1 / 12) * ((1 + 0.1 / 12) ^ 240) / ((1 + 0.1 / 12) ^ 240 - 1)`
  • `4,000,000 * 0.0083 * ((1 + 0.0083) ^ 240) / ((1 + 0.0083) ^ 240 - 1)`
  • `33,333.34 * (1.0083 ^ 240) / (1.0083 ^ 240 - 1)`
  • `33,333.34 * 7.3281 / (7.3281 - 1)`
  • `244,268.6781 / 6.3281`
  • EMI = `38,600.8804`
 
Created: Apr 30, 2018
Online Tool Designed For: Windows, OS X, Android, iOS, Linux
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